Brian Frank

and there it is: ORACLE SAYS IN FY 2027 IT EXPECTS TO RAISE APPROXIMATELY $40BN THROUGH A COMBINATION OF DEBT AND EQUITY FINANCING

Not sure everyone appreciates what these AI-related capital raisings mean in a historical capital market context. Alphabet’s $85 billion raise last week was more than 3x the size of the Saudi Aramco IPO, previously the largest equity raise ever. Next up: SpaceX, Anthropic, OpenAI & potentially Meta (secondary). The question isn’t whether the capital can be raised. I suspect it can. The question is what gets starved of capital while AI hoovers up hundreds of billions, nota bene while the usual Middle Eastern oil & gas capital isn’t available to the same extent. Every bubble has a vacuum cleaner effect. This one may be the largest capital absorption event markets have ever seen.

I made another wild chart. Only once before have we seen Tech go vertical while Staples and Financials refused to tag along. That was the 12-month window through Q1/2000.

THE WALL OF SUPPLY Start to hear some ppl comenting on the wall of supply (Paul T Jones being one of the early ones), which usually puts downward pressure on index as the market needs to digest all the new supply. However, I see little people talking about the magnitudes so I just did a funny exercise: look at the past. The 2020-21 supply, which signaled the market top was around $385bn in total (2020+2021 including IPOs + SPACs). This year, we are mid-year and already did/announced around $400bn !!! Plus, you have massive debt issuance, so supply scale is something we've never seen in history! Funny times.