Peter Boockvar on AI, the Wealth Effect and the Two-Speed Economy

Micron Technology

Across the shows: 26 speakers in other episodes, 24 bullish and 15 bearish calls, past 30 days

• Peter Boockvar · OnePoint BFG Wealth PartnersBearish

  Micron's low P/E signals peak earnings; memory supply glut looms in 2028-2029 as demand cycle rolls over.

  Boockvar argues memory is a cyclical business, so a low P/E on one year of earnings is a warning sign, not a bargain. Micron was trading at about six times earnings, and he notes it was the number one holding in the Vanguard Value Fund for that reason. Roughly half of Micron's sales are contracted, but the other half is not, so earnings remain exposed. Stocks price in rate of change, and investors are now pricing in peak capex. Commoditized DRAM and NAND supply is coming in 2028 and 2029, which would hit prices after demand from the hyperscaler buildout slows. At the June peak Micron traded at about 10 times sales, the same multiple it hit at its 2000 peak, so valuing a cyclical on earnings alone is not a full analysis.

  “you wanna sell the stock when there's a low PE because that's usually peak earnings. The amount of times that I heard over the last three months how cheap Micron was because it was trading at six times earnings.”at 14:46

IREN

Across the shows: 1 speaker in other episodes, 0 bullish and 1 bearish calls, past 30 days

• Peter Boockvar · OnePoint BFG Wealth PartnersBullish

  IREN's own-build model avoids the lease burden that makes CoreWeave riskier.

  Boockvar contrasts IREN with CoreWeave. IREN buys the land, builds the buildings, owns the compute and leases the capacity out. CoreWeave, by contrast, leases the buildings on long terms while buying the chips, which creates heavy lease obligations. He cites IREN as the better comparison point against CoreWeave's lease-heavy model. His support for IREN is brief and comparative, not a full valuation case.

  “[IREN's] model is to buy the land themselves, build the buildings themselves, own the compute themselves, and then lease that out to whoever wants to use it.”at 16:35

CoreWeave

Across the shows: 85 speakers in other episodes, 25 bullish and 93 bearish calls, past 30 days

• Peter Boockvar · OnePoint BFG Wealth PartnersBearish

  CoreWeave's lease obligations and debt costs threaten returns; equity looks priced for possible wipeout.

  CoreWeave leases its buildings on roughly 20-year terms but rents out compute on three- to five-year cycles, which leaves a mismatch between its lease commitments and its revenue. Those commitments, plus heavy borrowing, now carry high costs, so the question is whether its return on capital will exceed its cost of capital. If not, the model destroys value. Boockvar argues against betting on rising GPU rental prices, because technology prices historically fall, even if cheaper compute stimulates demand. CoreWeave's credit default swaps are around 1,200 basis points. On a five-year $10 million bond, that implies about a 60% chance of default, while the equity still carries a market cap of $25 to 30 billion. Meta's lease guarantees partly mitigate the risk, but he remains skeptical of the business model.

  “So I'm very skeptical of these business models, particularly for [CoreWeave] just because of their cost of capital and them having... And creating so many lease obligations”at 18:30

Nebius Group

Across the shows: 6 speakers in other episodes, 3 bullish and 6 bearish calls, past 30 days

• Peter Boockvar · OnePoint BFG Wealth PartnersBullish

  Nebius has a stronger balance sheet than CoreWeave and can better withstand the AI infrastructure downturn.

  Boockvar says Nebius has a much better balance sheet than CoreWeave, which gives it more room to weather a downturn in AI infrastructure financing. This is a relative comparison against CoreWeave's heavy debt and lease obligations. He does not give a detailed financial case for Nebius.

  “Nebius has a much better balance sheet, so I think they can weather the storm better than [CoreWeave].”at 18:39

OpenAI

Across the shows: 40 speakers in other episodes, 21 bullish and 29 bearish calls, past 30 days

• Peter Boockvar · OnePoint BFG Wealth PartnersUncertain

  OpenAI's profitability is in doubt amid cheaper open-weight competition and its large share of cloud backlogs.

  Boockvar argues that open-source and open-weight models are getting faster and cheaper, which intensifies pricing pressure on closed model makers. He questions whether OpenAI and Anthropic can be profitable under that competition. The concern is amplified by concentration. He estimates that OpenAI accounts for about 40% of Micron's backlog and about 25% of AWS's business, so the cloud and memory supply chain depends heavily on OpenAI's ability to pay. He frames this as an open question rather than a firm call.

  “can OpenAI and Anthropic, at the end of the day, be profitable entities in the face of all this competition.”at 21:25

NVIDIA

Across the shows: 75 speakers in other episodes, 65 bullish and 26 bearish calls, past 30 days

• Peter Boockvar · OnePoint BFG Wealth PartnersUncertain

  Nvidia's balance sheet is safe, but its financing commitments across the AI buildout create exposure.

  Boockvar says Nvidia's balance sheet can handle the strain, so the company itself will be fine. However, its financing reach extends across the AI buildout, and it has taken on many obligations to keep selling chips. He describes Nvidia's financing tentacles as spread across the ecosystem. This makes Nvidia exposed to the same chain of risk as the neoclouds and labs that depend on it, though he does not quantify the exposure.

  “NVIDIA will be fine from... In terms of their balance sheet, but, you know, their fingers are in everyone's pot in order for them to wanna sell more chips. But they've created a lot of obligations for themselves”at 22:18

Nestlé

• Peter Boockvar · OnePoint BFG Wealth PartnersBullish

  Nestle is cheap, a non-AI overseas holding his fund is long.

  Boockvar says his fund is long Nestle in Switzerland. He describes it as one of the non-AI, non-US opportunities he finds in staples, financials and commodities, all trading at cheap valuations. That is his evidence that overseas value exists outside the AI trade.

  “Like, we're [long] Nestle in Switzerland, the [Veolia] environment based in France.”at 47:27

Veolia Environnement

• Peter Boockvar · OnePoint BFG Wealth PartnersBullish

  Veolia trades cheap despite global operations, held back by a French discount.

  Boockvar describes Veolia (transcribed as the 'Olea environment') as a non-AI overseas business that operates globally but is based in Paris. He says it carries a French discount that makes its valuation cheap despite its international business. He groups it with other cheap overseas names such as Nestle and Rentokil.

  “the [Veolia] environment based in France. And, unfortunately, because it's based in in Paris, you know, it has that French discount even though they are doing business all around the world.”at 47:34

Rentokil Initial

• Peter Boockvar · OnePoint BFG Wealth PartnersBullish

  Rentokil, owner of Terminix, trades at a cheap valuation as a non-AI London stock.

  Boockvar names Rentokil (transcribed as 'Rent to Kill'), the London-based owner of Terminix pest control, as a non-AI overseas stock. He says it, along with Nestle and Veolia, is trading at a really cheap valuation. He presents it as an example of the overseas non-AI opportunities he sees.

  “Rent to Kill, which owns Terminix Pest Control based in London, all trading at really cheap valuations.”at 47:46

The Kraft Heinz Company

Across the shows: 1 speaker in other episodes, 1 bullish and 0 bearish calls, past 30 days

• Peter Boockvar · OnePoint BFG Wealth PartnersBullish

  Kraft Heinz is bottoming; beaten-down packaged food should benefit in a slowdown.

  Boockvar's fund owns Kraft Heinz, and he thinks food stocks that have been destroyed by poor business are bottoming. Their defensive nature should help them if the economy slows. He cites value-focused, lower-middle-income consumer demand, like a $8 Conagra frozen meal offering cheapness, protein and convenience. He prefers beaten-down names where a real business change, such as a new CEO, marketing plan or product, could mark an inflection, while staying wary of melting ice cubes.

  “You know, I think that those stocks are bottoming.”at 51:37

AI infrastructure & data centers

• Peter Boockvar · OnePoint BFG Wealth Partners

  Hyperscaler capex is near peak; stocks already price it in, with a big falloff expected in 2028.

  Boockvar uses about $1.2 trillion of 2027 capex from the five hyperscalers as his bar, up roughly 50% from about $800 billion. He expects it to land at $1.1 to $1.2 trillion and doubts it reaches $1.3 trillion. The key point is that stocks trade on the rate of change, not the level. Investors are already pricing in peak capex, as the selloff shows, and stocks typically move before the actual peak. Analysts who say spending will still rise next year are missing the point if growth in spending is about to roll over. He expects a big capex falloff in 2028 that will still be fairly robust in absolute terms.

  “I think that's inevitable that from a CapEx perspective, we're gonna get a big falloff in 2028. It'll probably still be pretty robust”at 11:36

• Peter Boockvar · OnePoint BFG Wealth Partners

  Data center construction jobs hold up in 2027, but state permit curbs could hit construction in 2028.

  Boockvar says data center construction is the one source of construction job growth, while office, mall, shopping center and Sunbelt multifamily building have fallen off. Construction jobs in 2027 should be fine because many projects are already underway, with shovels in the ground, and permitted projects are moving ahead. Some buildings will not be built in 2027 because they are waiting for permits. Newly announced state governor restrictions on data center construction would mainly affect 2028, when they hit actual construction. Jobs in the sector are therefore linked to the pace of AI capex.

  “construction jobs will be fine in 2027 because a lot of these projects are already underway.”at 34:33

• Peter Boockvar · OnePoint BFG Wealth Partners

  AI spending touches up to 80% of Q3 earnings growth via machinery, electrical and metals suppliers.

  Q3 earnings growth is expected above 30%, with about a third from Nvidia and Micron and two-thirds from other tech. Within that, machinery, electrical equipment, and steel and aluminum stocks selling into data centers make up up to 80%. Boockvar concludes that up to 80% of Q3 earnings growth touches AI, so earnings breadth depends heavily on the data center buildout.

  “up to 80% of that is machinery stocks, electrical equipment stocks, steel and aluminum stocks that are selling stuff into these data centers. So you could argue up to 80% of q three earnings growth is touching AI.”at 35:52

• Peter Boockvar · OnePoint BFG Wealth Partners

  Data center construction is pulling skilled workers off other sites, worsening labor shortages from immigration limits.

  Homebuilders, especially smaller ones, report more difficulty finding labor, and bigger builders must pay more to compete. Boockvar says construction workers are being competed for and that data center construction is pulling workers off other sites. He concludes that immigration has hurt labor supply in construction.

  “Data center construction workers are getting pulled off other sites. So immigration has definitely impacted that.”at 37:55

• Peter Boockvar · OnePoint BFG Wealth Partners

  Peak AI capex would mark a peak for picks-and-shovels and cloud businesses, and possibly the dollar and short rates.

  Boockvar argues that if AI capex peaks, picks-and-shovels AI suppliers will peak with it, and so will hyperscale and cloud businesses. A slowdown would also weaken US growth and the stock market, which would reduce dollar strength and make Fed cuts more likely. He treats that as a possible turning point, while saying long-term rates could still rise.

  “if you have peak CapEx, you have peak picks and shovels AI stocks. You may have peak hyperscale or cloud business.”at 50:24

Oil & fuels

• Peter Boockvar · OnePoint BFG Wealth Partners

  Oil inventories need about two years to rebuild even after the Strait of Hormuz fully reopens.

  Citing Saudi Aramco, Boockvar says about 3 billion barrels of supply were lost over eight months. About 2 billion were replaced through pipeline workarounds, and about 1 billion came from strategic and commercial inventory drawdowns. Demand remains steady, so those inventories must be refilled, possibly beyond their prior levels. Aramco estimates normalization takes about two years even if the Strait reopens fully, which supports crude demand after shipping resumes.

  “So they estimate that it's gonna take two... Even if the Strait opened today fully and it was... Everything was back to normal, that it's gonna take two years to sort of normalize.”at 40:07

• Peter Boockvar · OnePoint BFG Wealth Partners

  US shale output is plateauing, losing its role as the main non-OPEC swing supply.

  US oil output rose from about 5 million to about 14 million barrels a day over fifteen years and was the biggest swing factor in non-OPEC+ supply. Boockvar cites Gering's Adam Rosenswag and other research that shale basins are plateauing and some are rolling over, with the Permian on the cusp of a plateau. Offsets from Brazil, Guyana and possibly Venezuela won't fully replace that flexibility.

  “the shale basins for now, are plateauing. And in some regions are rolling over in terms of growth. And the Permian, which is the biggest, is... We're on the cusp of a plateau.”at 40:45

• Peter Boockvar · OnePoint BFG Wealth Partners

  Energy producers stay capital-disciplined, so oil dips after a war ends should be bought.

  Boockvar listens to energy earnings calls and sees companies investing to find barrels but not overinvesting. They prioritize debt reduction, dividends and buybacks, and they are cautious because a war-driven price spike could reverse quickly. That discipline should support oil. If the war ends and prices fall, as after the MOU, he thinks the drop in oil and energy stocks should be bought because the sector remains attractive. He says rig counts show US producers respond to high prices, though shale is quicker to respond than offshore.

  “CEOs are still very much... They're they're definitely investing. They wanna find more barrels, but they're not overinvesting.”at 41:19

• Peter Boockvar · OnePoint BFG Wealth Partners

  Inflation-adjusted, $100 oil is historically not expensive; demand destruction would cap spikes.

  Oil's 2008 peak of about $150 equals roughly $200 in today's dollars, so a $200 oil call is not unreasonable. Boockvar doesn't expect prices to stay that high, because a sharp demand destruction response would follow. He argues that $100 oil is historically moderate in inflation-adjusted terms.

  “Now if it goes there, I don't think it stays there because there'll be a dramatic demand destruction response to it. ... That's my point is that $100 oil historically in inflation adjusted is really not expensive.”at 45:05

US rates & the Fed

• Peter Boockvar · OnePoint BFG Wealth Partners

  Fed is in a tweaking cycle, not a hiking cycle, and will not hike in December as AI financing strains rise.

  Boockvar sees the Fed making small, tweaking-style adjustments rather than starting a multi-hike cycle, and he rejects the historical comparisons that predict three to five more hikes. He expects the Fed to pause in December because it knows how large a contribution the AI buildout is to growth and inflation. He points to Fed officials' growing attention to the cost of financing AI projects. The Fed chair's remark about paying attention to CoreWeave and other AI names' cost of capital signals that financing conditions for AI are now on policymakers' radar. A sell-off in the AI trade would make a December hike even less likely.

  “The Fed is not hiking in December, because how can you hike? They know how big of a contribution this AI build out has been, both in terms of economic growth and inflation.”at 26:14

• Peter Boockvar · OnePoint BFG Wealth Partners

  The Fed will deliver at most one more rate increase, so short-term rates are near their peak.

  Boockvar sees the Fed as near the end of its tightening. He expects at most one more rate increase, which supports the view that short-term rates are close to peak. He stresses that long-term rates could still rise even if short-term rates peak. This sits alongside his view that the dollar is topping and gold is setting up.

  “We're topping out, and I have what I think is the Fed that at most will give us one rate increase.”at 55:15

US jobs & labor market

• Peter Boockvar · OnePoint BFG Wealth Partners

  Wage growth of about 3.7% only matches inflation, leaving many workers running in place.

  Boockvar points to payroll data showing average weekly earnings up about 3.7% and inflation also up about 3.7%. Nominal wage growth is decent in absolute terms, but it is only keeping pace with prices. He concludes that many people are running in place and some are falling behind. He says companies told him this during earnings season, which supports the argument.

  “average weekly earnings are up about 3.7%, but inflation's up about 3.7%. So you have on an absolute basis decent wage growth, but it's only keeping pace with inflation.”at 32:12

• Peter Boockvar · OnePoint BFG Wealth Partners

  Tariff cost shocks cut small business hiring in 2025; hiring has since rebounded.

  Small business hiring fell sharply in 2025, which Boockvar attributes to tariffs. Tariffs created a cost and supply shock that smaller firms lacked the flexibility to absorb, so slowing or cutting hiring was their first lever. Hiring has rebounded this year as visibility improved, though refunds and other effects complicate the picture. He stresses that labor data should be read by industry and business size.

  “In 2025, small business hiring fell off a clip. I attribute that to the tariffs. Because all of a sudden, you have this cost supply shock to a lot of different small businesses that don't have the flexibility and the agility to quickly pivot around it.”at 36:55

Gold & precious metals

• Peter Boockvar · OnePoint BFG Wealth Partners

  Gold is bottoming: central bank buying, falling real rates and a weakening dollar line up.

  Gold's pullback followed a strong run and was partly expected as a consolidation after higher real rates and a stronger dollar. Those headwinds have reversed: real rates are rolling over and the dollar is near a notable weakening. Central banks bought about 321 tons in Q3 after heavy buying in Q2, which he sees as a durable bid. Boockvar expects consolidation may continue, but says the fundamentals are coming together as gold nears a final bottom.

  “So that central bank bid is still very much there. So I got the central bank bid that's there.”at 55:03

• Peter Boockvar · OnePoint BFG Wealth Partners

  Gold miners are cheap, with fat margins at $4,000 gold, though they trade daily with the metal.

  At about $4,000 gold, miners' margins over all-in sustainable costs remain wide and they generate substantial free cash flow. Algorithms trade miners with the daily gold price, so strong fundamentals are often masked. Boockvar thinks miners are set for a strong move if gold has legitimately bottomed.

  “So gold mining stocks are definitely cheap. Even with this pullback in gold, I mean, $4,000 gold relative to their all in sustainable cost, still a fat margin.”at 55:46

US growth & recession risk

• Peter Boockvar · OnePoint BFG Wealth Partners

  Without the AI trade and upper-income spending tied to stocks, the US economy would likely be in recession.

  Boockvar describes the US economy as very mixed, with the AI buildout and stock-market wealth effects holding it up. Upper-income households benefit from the stock market, and that spending props up the economy. Strength from AI-related construction and capex therefore carries much of the growth. Without that support, he thinks the economy would probably already be in recession. The same dependence shows up in leisure, hospitality and retail hiring, which he expects to be sensitive to the stock market.

  “without the AI trade, without upper income spend benefiting from the stock market, you know, The US economy would probably be in a recession.”at 7:27

Commodities (broad)

• Peter Boockvar · OnePoint BFG Wealth Partners

  In most commodities demand grows steadily, so supply-side variability is what drives boom-bust cycles.

  Boockvar says demand in most commodities, especially agriculture and oil, is fairly linear, with modest hits in recessions. The hard part for commodity investors is getting the supply side right. In DRAM, volumes have grown for decades, yet supply swings create the boom-bust pattern. He uses this framework to argue that memory cyclicality will not go away, and that the key risk for chip makers is a supply glut.

  “in most things, particularly in ag, even in oil, you know, the demand is pretty linear. ... It's really getting the supply side right.”at 13:11

US stock market outlook

• Peter Boockvar · OnePoint BFG Wealth Partners

  Market is an either-or AI trade; if peak capex is real, non-tech and international stocks could outperform.

  Boockvar sees the market as an either-or trade in which AI gains come at the expense of other stocks and days when AI falters help everything else. He compares this to the late 1990s, when non-tech stocks were left for dead until tech turned in March 2000. Value stocks and international stocks without heavy tech weight did well in 2000 and 2001, before the 2002 recession ended the rotation. If peak capex is real and the sell-off is not a blip, non-AI stocks have a chance to outperform while the AI trade gets bumpier.

  “It's sort of taking money from other things and then vice versa. You know, that has been the case seemingly all year, and, it'll it'll continue until it doesn't.”at 22:47

US inflation

• Peter Boockvar · OnePoint BFG Wealth Partners

  Upper-income spending fed by stock gains keeps inflation firm, letting airlines like Delta raise prices.

  Boockvar argues that steady upper-income demand, supported by the stock market, has contributed to inflation. Delta's premium cabin is doing great because of these high-income travelers, which lets Delta raise prices by about 20%. His conclusion is that cutting airline fare inflation would require the S&P 500 to trade near 5,000 instead of about 7,400. This ties the wealth effect from equity prices directly to pricing power in consumer services.

  “upper income spend is a pretty consistent level of demand that has also led to inflate... Inflation. The premium cabin at Delta is doing great because of upper income spenders, which allows Delta to raise prices 20%.”at 29:54

US consumer

• Peter Boockvar · OnePoint BFG Wealth Partners

  Lower and middle-income consumers are squeezed, while experiential and upper-income spending stays strong.

  Boockvar says the consumer outside the upper end is challenged and budget-conscious. He cites restaurant and food companies including Wingstop, Papa John's, Chipotle, Dutch Bros, Hershey's and Kraft Heinz, which report weakness across the board, especially among lower and middle-income customers. Spending is being prioritized toward experiences. Live Nation's business is great, and Madison Square Garden's concerts and sports events are sold out. Luxury hotels are doing well, but Booking Holdings sees moderation with more domestic than international travel. The overall picture is a mixed bag shaped by income.

  “the consumer is, as we know, outside of the upper end, is definitely challenged. They're budget conscious. They're discerning with their spend.”at 30:42

Shipping, trucking & logistics

• Peter Boockvar · OnePoint BFG Wealth Partners

  Cargo demand for data center equipment is strong, as trucking firms and Maersk reported.

  Boockvar argues that the equipment going into data centers must be shipped by sea and air, so AI buildout drives freight demand. He says cargo demand for this equipment is pretty strong, which trucking companies and Maersk, which reported that week, confirmed. This is one of the places where AI capex shows up in the transport sector, and it is part of why he sees trade and transportation hiring as a bright spot.

  “all this stuff that gets to these data centers needs to... First of all, it needs to go on a ship, needs to go on a plane to get here. So cargo demand is pretty strong for this stuff”at 34:14

International equities

• Peter Boockvar · OnePoint BFG Wealth Partners

  Non-US markets have higher dividend yields than the S&P 500, and he is long Singapore, Vietnam and Brazil.

  The S&P 500 yields about 1%, while Brazil yields about 6%, London about 4.5%, and Singapore 4 to 5%. Boockvar's fund is long Singapore, Vietnam and Brazil, though it was hurt by Brazil's election results. He is still bullish on India, although its market has been digesting gains and is no longer as cheap. He sees a lot of opportunity overseas, helped by a weaker dollar in 2025 that let many cheap markets catch up.

  “very generous dividend yields. You know, the dividend yield in the S and P 500 is 1%. You go to Brazil, it's like six. You go to London, it's like four and a half.”at 47:59

US dollar

• Peter Boockvar · OnePoint BFG Wealth Partners

  The dollar tracks the AI trade, so an AI rollover would weaken it further.

  The dollar is highly correlated with the AI trade because global investors are long US tech stocks. If the AI trade rolls over, the dollar should weaken. Foreigners have cut their US Treasury exposure since the Russia-Ukraine war and bought gold, but still favor US tech. If they lighten US tech as well, that would further anchor the dollar. A weaker dollar would also benefit international stocks.

  “I think the dollar right now is highly correlated to this AI trade. And if this AI trade continues to roll over, people have to understand the whole world is long US tech stocks.”at 48:36

AI bubble & tech valuations

• Peter Boockvar · OnePoint BFG Wealth Partners

  The AI trade now makes up about half the S&P 500, a concentration risk that may be starting to crack.

  Boockvar notes that the AI trade is essentially half the S&P 500, so many retirement plans are concentrated in one theme. He says the question is not whether the AI trade hits a wall but when, and that it may already be starting to. He argues that portfolios need non-AI exposure, domestic or foreign, as a cushion.

  “But that one stock is essentially half the S and P, that being the AI trade.”at 53:29

Private credit

• Peter Boockvar · OnePoint BFG Wealth Partners

  Private credit defaults hit a record 6.3% per Fitch, with refinancing strain from pre-2022 loans.

  In a higher-rate environment, loans priced in 2021 or earlier are coming due at much higher costs. Fitch put the private credit default rate at a new high of 6.3%. Triple-C credit spreads have widened, and the leveraged loan index has weakened. Boockvar says high rates matter compared with the fifteen years of near-zero rates, especially for borrowers who must refinance now.

  “Fitch this week said that, their default rate calculation in private credit is at a new high, 6.3%.”at 56:52

Software & SaaS

• Peter Boockvar · OnePoint BFG Wealth Partners

  Software private-credit defaults are under 0.5%, far below other sectors, so the fear looks overstated.

  Software was a major concern for private credit this year, but its default rate is very low, below half a percent. Defaults are higher in other sectors such as healthcare, industrials and consumer products. Boockvar's point is that software credit risk is well contained compared with the rest of private credit.

  “software, which was a big concern this year with private credit, that's actually a very, very low default rate of less than a half a percent”at 57:01