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Putting together an AI Bubble Basket - who should be in or out?

Posted on: Sep 12 2025

Is record day for Oracle a sign of great things to come or a sign of a bubble?

Listen to the full episode now or follow the Saxo Market Call on your favorite podcast app.

The AI Bubble Basket stock list.

As mentioned on today's podcast, but now with fifteen stocks that I would argue belong in an AI Bubble Basket if we do indeed have an AI bubble on our hands. Plenty more to discuss on this front in future posts and we will track this once the basket contents are set on an equal-weight basis. Please let me know your thoughts on additional names (of a reasonably large size) you think belong or don’t belong on the list by commenting on this post by commenting on the John J. Hardy substack version of this post.

Candidates for the AI Bubble Basket

  • The obvious Mag7 candidates: Nvidia, Alphabet, Amazon, Microsoft, Meta

  • Others: Oracle, Broadcom, AMD, Micron, KLA Tencor, Lam Research, Coreweave, Arista Networks

  • The bubbliest: Applovin, Palantir

Today’s Links

Another shoutout to eurointelligence.com, one of the best sources of commentary on European issues, which get insufficient play in the English-language press.

Another shoutout, this one to Wolf Richter’s Wolfstreet.com, which provides excellent perspective on US economic data, particularly on housing. Thanks for a quick answer to my query yesterday, Wolf!

As we absorb yesterday’s PPI and today’s CPI, worth considering the US manufacturing Prices Paid versus final demand figures to emphasize the tax-like, potentially stagflationary impact first round effects of tariffs.

Ben Hunt at Epsilon Theory has a unique framework for commenting on our current age, as he argues that there is no turning back on the path we are headed down, which is toward financial repression, protectionism and … socialism? I do agree that the breaking of constitutional precedence is the most remarkable perhaps in US history and that the mid-term elections next year could trigger a profound constitutional crisis.

Michael Every is out with an update that scores how things are proceeding with the US’s “Grand Macro Strategy” - a useful framework for understanding US- and Trump administration policy in this new era.

Chart of the Day - Oracle (ORCL)

The Chart of the Day can’t be anything else today: Oracle’s move yesterday was perhaps the most remarkable day in market history for a single stock as Oracle shares added more the 250 billion in market cap, rising nearly 36% after exceeding a 40% ramp intraday. (I can’t think of any comparisons for a company approaching Oracle’s size). This far exceeds Nvidia’s stunning response to its early 2023 earnings report, when the stock jumped 24% the following day after noting an acceleration in data center sales. The company went on to more than triple its revenues over the ensuing 12 months on demand for its AI chips. A Barrons headline perhaps put it best “ Oracle May Be Having Its Nvidia Moment. Or It Could Be a Repeat of 1999.” Indeed, the stakes are high and the wriggle room limited for Oracle and all AI stocks from here after a move like this.

Source: Bloomberg

Questions and comments, please!

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JP 225 forecast: the uptrend has shifted to a short-term downtrend

Posted on: Sep 05 2025

The JP 225 index continues its correction within a downtrend. The JP 225 forecast for today is negative.

JP 225 forecast: key trading points

  • Recent data: Japan Tokyo CPI for August rose by 2.5% year-on-year
  • Market impact: this result is positive for the Japanese stock market

JP 225 fundamental analysis

Tokyo’s Consumer Price Index (CPI) rose by 2.5% year-on-year in August 2025, in line with forecasts but lower than the previous reading of 2.9%. For the Japanese equity market, this result matters. Easing inflation signals reduced pressure on consumers and businesses, which may act as a positive factor for domestic demand. However, inflation remains above the Bank of Japan’s target (around 2.0%), supporting arguments for a cautious review of monetary policy.

For the JP 225, the sectoral impact is mixed. The consumer sector (retail, restaurants, and everyday goods) benefits from lower inflationary pressure, which supports purchasing power. Export-oriented companies may also gain if expectations of a softer Bank of Japan stance put downward pressure on the yen, improving competitiveness abroad. Conversely, the financial sector may face limits, as slower inflation reduces the likelihood of aggressive interest rate hikes, restraining bank margins.

Japan Tokyo Core CPI YoY: https://tradingeconomics.com/japan/tokyo-core-cpi

JP 225 technical analysis

The JP 225 index declined below the 43,385.0 level before entering a downtrend. The support level is located at 42,005.0, with resistance at 43,045.0. Currently, there is a likelihood of further short-term downward movement.

The following scenarios are considered for the JP 225 price forecast:

  • Pessimistic JP 225 scenario: a breakout below the 42,005.0 support level could send the index down to 40,625.0
  • Optimistic JP 225 scenario: a breakout above the 43,045.0 resistance level could drive the index to 43,910.0
JP 225 technical analysis for 4 September 2025

Summary

Overall, the slowdown in Tokyo’s inflation may be seen by investors as a stabilising factor, increasing the attractiveness of Japanese equities. For the JP 225, this creates a base for moderate growth, especially in consumer demand–driven and export-oriented sectors. The next downside target for the JP 225 index is 40,625.0.

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US 30 forecast: the uptrend has resumed, but remains weak

Posted on: Sep 04 2025

The US 30 index has reached a new all-time high, but the trend remains unstable. The US 30 forecast for today is positive.

US 30 forecast: key trading points

  • Recent data: US ISM manufacturing PMI came in at 55.5 in August
  • Market impact: such a result signals restrained sentiment among investors

US 30 fundamental analysis

The ISM manufacturing PMI for September 2025 stood at 48.7 points, below the key 50.0 mark that separates growth from contraction. It was slightly higher than the previous 48.0 but lower than the forecast of 49.0, indicating that the US manufacturing sector continues to face difficulties, remaining in contraction territory.

For the US 30 index, which has a significant share of industrial companies, the PMI reading may exert negative pressure. Stocks of equipment producers, machinery makers, and commodity companies may come under pressure, as the data points to weaker demand in the real economy. At the same time, companies in healthcare, technology, and services could maintain relative resilience, since their business models depend less on manufacturing dynamics.

US ISM Manufacturing PMI: https://tradingeconomics.com/united-states/business-confidence

US 30 technical analysis

The US 30 index has returned to an upward phase. The resistance level has formed at 45,790.0, with the support level at 44,590.0. Volatility remains elevated, indicating the unstable nature of the current trend. Growth remains limited in the short term, with the weak nature of the trend increasing the likelihood of its reversal into a downtrend.

The US 30 price forecast considers the following scenarios:

  • Pessimistic US 30 scenario: a breakout below the 44,590.0 support level could send the index down to 43,325.0
  • Optimistic US 30 scenario: a breakout above the 45,790.0 resistance level could drive the index up to 46,595.0
US 30 technical analysis for 3 September 2025

Summary

For the US equity market, such data signals investor caution. Declining manufacturing activity could intensify concerns about the health of the economy, particularly in the industrial and export segments. At the same time, weaker readings increase the likelihood of more accommodative action from the Federal Reserve, which may support financial markets overall. The next upside target for the US 30 could be 46,595.0.

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