Topic
AI models are arriving faster while the cost of building them keeps rising. The link between model capability, durable value, and cash flow is less direct than the headlines suggest.
The price-to-earnings ratio shows how the market is pricing a company’s earnings and future expectations. A high or low PER alone cannot tell us what a business is worth.
Higher rates reduce the present value of future cash flows. Companies respond differently because the timing of their cash flows and their growth expectations are not the same.