Money & Megatrends

December 11, 2025

By Brian Hunt

Inside today’s issue:

Are you on the winning side of AI? A major new development in the great “AI Boom or AI Bust” Debate
One of our top ways to invest in soaring power demand looks poised to head higher
You probably missed it, but many of the world’s most important stocks just hit all-time highs
Bullish for critical resources: Copper mining blue chip Freeport McMoRan reaches a new 1-year high

Are you on the winning side? A major new development in the great “AI Boom or AI Debate”

It’s now official: It’s AI Boom, not AI Bust.

Yesterday, the VanEck Semiconductor ETF (SMH) closed above its previous all-time high of $368.61 per share. The market value of the semiconductor industry has never been higher. It’s a significant new development in the world’s most important financial debate.

Over the past three months, we have frequently highlighted how “AI Boom or AI Bust” has become the world’s most important financial debate.

More than three years into the AI boom, tech giants Meta, Google, Amazon, OpenAI, and Microsoft are in an epic race to build the world’s best AI models and infrastructure. This year, they are on pace to spend around $400 billion on AI infrastructure, with more than a trillion dollars coming behind it. It’s the largest infrastructure spending boom in history.

Whether Big Tech’s gigantic investment pays off or not has become the most important issue in the stock market.

AI bears say much of this spending is crazy. It won’t generate the revenues and profits required to justify it. Once the world realizes this is the case, GDP growth will stall, and the stock market will plummet.

AI bulls say, “AI is the most transformative innovation of the century. Big Tech leaders know what they are doing. The coming innovations will justify the enormous investments.”

Regular readers know we like to know both sides of any debate about the “fundamentals” of a megatrend. But what the market thinks of those fundamentals is far more important than either side’s beliefs.

You can track and trade what the market thinks of the great “AI Boom or Bust” debate with the VanEck Semiconductor ETF (SMH). This fund owns the world’s largest and most essential chip companies, including AI giants Nvidia (NVDA), Taiwan Semiconductor (TSM), and Broadcom (AVGO).

If the AI bulls are right, this fund goes higher. If the AI bears are right, this fund goes lower. As you can see in the chart below, the bulls are the clear winners.

Yesterday, SMH closed at $374.10 per share… well above its October 29 closing high of $368.61 per share. The trend is clear. We are in an AI Boom, not an AI Bust. Trade accordingly!

Semiconductors reach all-time highs

One of our top ways to invest in soaring power demand looks poised to head higher

After taking a breather, our solar trade looks ready to run higher again.

In our September 23 issue, I made the case for being bullish on solar energy stocks:

The power consumption theme is one of the AI megatrends’ largest and most profitable facets. Industry experts believe solar energy can’t compete with nuclear and fossil fuels to supply enormous amounts of “always on, always there” baseload power needed for AI data centers.

However, inexpensive and easily installed solar systems can supply smaller individual power consumers, such as homes, offices, stores, and small factories.

This means demand for solar power is increasing because AI is driving up the price of other forms of electricity.

Right after we published our bullish note, solar stocks – as tracked by the Invesco Solar ETF (TAN) took off like a rocket, climbing 20% in under two months. Since then, TAN has corrected along with the broader market.

As you can see in the chart below, TAN has digested this correction and stabilized in the $ 48-per-share area. Given solar’s strong demand outlook, I bet TAN goes higher from here.

Solar stocks have corrected and are poised to head higher

You probably missed it, but many of the world’s most important stocks just hit all-time highs

Yesterday, the financial media fixated on the Federal Reserve’s quarter-point rate cut. In the aftermath of the cut’s announcement, dozens of analysts and personalities offered their take on the situation.

Rate cuts received so much attention that it was easy to miss some hugely important stock moves in a group of companies I call “real-world economic indicators.”

Many investors obsess over government data such as unemployment figures, job hirings, and the CPI. I like to know that data as everyone else does. However, when I want a read on what’s really happening in the economy, I look at what’s happening in the real world. I look at stock prices. I listen to the judge, jury, and executioner of any thesis, any trend, and any claim: The market.

Specifically, I look at the stock price action of companies and industries that make up the world’s economic core… companies sensitive to megatrends in manufacturing and infrastructure building. In this group, you have construction equipment maker Caterpillar (CAT), high-horsepower engine maker Cummins (CMI), heavy truck maker Paccar (PCAR), steelmakers, trucking firms, and cement firms. These firms rise and fall in line with the world’s ability to finance and build factories, cities, airports, highways, and skyscrapers.

The stock market is one of the world’s greatest forecasting mechanisms. It tends to look ahead 6 -12 months in advance. When an industry is in a recession, its stock prices will rise before the news media says it is recovering. When an industry seems to be doing well, its stock prices will decline before the news covers its downturn. This is often called “discounting the future.”

Over the past three months, I’ve frequently highlighted the strength in Cummins, Caterpillar, and transportation firms as evidence that the economy is doing much better than the pessimists would have you believe. Yesterday, these critical stocks reached new all-time highs.

And notably, the VanEck Steel ETF (SLX) also reached an all-time high. This fund owns a variety of big steelmakers and iron ore miners.

In a high-tech world of iPhones, ChatGPT, and Instagram, it’s easy to forget our world is built on a low-tech foundation of steel and concrete. Steel is a major component of bridges, cars, trucks, power lines, ships, pipes, factories, construction equipment, and skyscrapers. This means when the global steel industry is enjoying strong revenues and rising share prices, it’s an excellent signal for the global economy.

As you can see in the chart below, the steel industry is doing well. SLX is up 26% over the past year and just reached an all-time high. We see this incredible trend and ask, “Can things be all that bad in the economy?” (Answer: No)

A critical industry reaches an all-time high

Market Notes

Blue chip copper miner Freeport McMoRan (FCX) reached a 1-year high today. This is further confirmation we’re in a bull market for critical resources.
Shipping giants FedEx (FDX) and UPS (UPS) reached new 1-year highs today. These are bullish economic signals.
Gold mining royalty giant Royal Gold (RGLD) reached an all-time high today. The gold stock bull market continues.
Financial giants Goldman Sachs (GS), Capital One (COF), and American Express (AXP) reached new all-time highs today—more bullish economic signals.
Silver and silver stocks soared to new all-time highs today.