Speaker · Updated
Paisley Nardini: latest market views
Tema ETFs
Summary
Head of Investment Strategy at Tema ETFs since September 2026, a CFA and CAIA charterholder and multi-asset strategist who previously led multi-asset solutions at Simplify Asset Management and held roles at Invesco, PIMCO and Wells Capital Management.
Chorus has 30 views from Paisley Nardini across 2 episodes on Bloomberg Surveillance and Excess Returns since October 18, 2026. Their latest calls: bullish on Anthropic and Space Exploration Technologies.
Where they stand
Their latest bullish or bearish call on each company.
- AnthropicBullish ·
- Space Exploration TechnologiesBullish ·
What they talk about most
- US stock market outlook · 10
- AI infrastructure & data centers · 4
- AI bubble & tech valuations · 2
- Earnings & corporate profits · 2
- Anthropic · 1
- US elections & politics · 1
- AI chips & semiconductors · 1
- Commodities (broad) · 1
- Enterprise AI adoption & AI software · 1
- IPOs, M&A & deal activity · 1
- Market sentiment, positioning & volatility · 1
- Power demand & the grid · 1
The latest views
Newest first. Every quote is checked against the episode's transcript.
Still bullish long term on AI; recent selloff and valuations make it a buying opportunity.
AI thematic ETFs have seen historic inflows this year, driven by the AI trade and its bottlenecks. Even though AI has been beaten up in recent weeks, Tema's clients are stepping back, and the firm sees the sell-off as a potential buying opportunity given attractive valuations. They remain bullish on the sector over the long term.
“even though AI broadly has gotten beaten up in the last couple weeks, we're still bullish on the sector long term. We actually see this as a potential buying opportunity just given some of the attractive valuation.”at 20:45
AI infrastructure & data centers
Fund flows are rotating from hyperscalers into AI bottleneck plays such as photonics and optical.
A lot of thematic ETF flows are leaving the hyperscalers and mega caps for bottleneck plays. Photonics and optical are examples. Data centers are needed to support the AI build-out, so the infrastructure itself has been top of mind, and the flows accompany these high-level themes.
“a lot of the flows are leaving some of the hyperscalers, some of the mega cap companies into more of those bottlenecks. Some specific examples of that would be in photonics optical.”at 21:26
AnthropicBullish
Anthropic's S-1 shows a strong cash position, low burn to profitability, and a diversified customer base.
In the S-1, Anthropic shows about $130 billion in cash and only about $9 billion in net cash burn to reach its profitability level, which is impressive, particularly as hyperscalers are penalized for spending cash. A year ago the top two customers were 20 to 25% of revenue, and now the top five are about 20%, so roughly 80% of revenue comes from outside the top five. Business breadth is encouraging, and the filing's healthcare and pharmaceutical information points to diversification. Tema is constructive on the filing.
“a stronger balance sheet from a cash perspective... the fact that Anthropic is still showing about a 130,000,000,000 in cash and only about a $9,000,000,000 net cash burn to get to this profitability level is impressive.”at 22:26
Market expects gridlock, which is bullish: no major regulation or policy shifts for two years.
Markets are anticipating gridlock. That is bullish because it means no massive regulation or policy shifts in the next two years, so markets can focus on current information. The uncertainty before the midterms is what the market dislikes, and the market wants certainty whether the news is good or bad.
“What the market is anticipating currently is, of course, gridlock... it essentially just means that we're probably not gonna have any massive regulation or policy shifts in the next two years.”at 24:54
Stocks typically rise after midterms, averaging about 14% over the six to twelve months after.
Post-midterm the stock market has typically moved higher. Looking back to around mid-century, the average return was up about 14% in the six to twelve months after a midterm. That historical pattern is a tailwind for markets now.
“post midterms, we typically tend to see the stock market move higher... the average return of the stock market was up around 14% in the six to twelve months after a midterm.”at 25:06
Markets penalize even beats; investors now want proof of return on hyperscaler AI spending.
Meeting or beating expectations no longer lifts stocks because the market looks under the hood. This is a shift from the last three years, when a rising tide lifted all boats. For hyperscalers, the market wants to see that AI spending will earn a return on investment. Alphabet was penalized as search ad revenue declined, so the market is becoming more discerning.
“stocks are still getting penalized because the market actually cares about what's going on under the hood... making sure that spend is actually gonna have a return on investment.”at 25:56
Earnings broadening from megacaps to the other 493 stocks is bullish heading into 2027.
FactSet data shows Magnificent Seven earnings growth decelerating in expectations for the fourth quarter, with the baton passing to the other 493 companies. The broadening trade could be supported by fundamentals rather than just technicals. Breadth was a concern in August and September, and now defensive health care is playing against tech and discretionary, which is bullish for markets heading into 2027 if fundamentally supported companies outside tech lead.
“the MAG seven earnings growth is starting to decelerate expectations for fourth quarter of this year, and the baton is being handed over to the other 493 companies.”at 26:20
Expects a slower Fed hiking path, which she sees as positive for markets overall.
The Fed has started hiking again and the open question is whether this is a single hike, a pause, or an expedited cycle that pushes rates much higher. Monetary policy is data-dependent and inflation has been running hot, so policy reacts with a lag. She is optimistic the path will be slower, which she believes is positive for markets more broadly, while noting that the market is feeling pressure today from yields backing up and the Fed starting to tighten.
“I'm actually quite optimistic that it's gonna be a slower hiking path, which I think is positive for more markets overall.”at 5:03
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Equities usually dip briefly after the first Fed hike, then gain strongly over the next twelve months.
Citing data going back to the mid-1990s and several tightening cycles, she says markets usually digest the first hike with a pullback of only a couple percent in the broad equity market. The twelve months after the initial hike have historically delivered pretty attractive gains, and she applies this to the current cycle.
“We usually do see a bit of a pullback, maybe only a couple percent in the broad equity market. But it's the twelve months following that initial hike that we start to see pretty attractive gains.”at 6:18
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Index calm hides deep breadth damage: most S&P stocks are in drawdowns far beyond the index's ~9%.
The 2026 S&P drawdown has been only about 9%, well short of the typical 15 to 20% midterm-year drawdown. But breadth has deteriorated and many constituents are well below a 15% or even 20% drawdown. Mega caps are so large that they mask this weakness at the index level, so the average drawdown may already be playing out in the broader constituents.
“If we look at a lot of the stocks in the S and P, they are well below that 15% drawdown, if not even a 20% drawdown.”at 8:44
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Six to twelve months after the midterms should be quite bullish once political uncertainty clears.
Midterm years have historically had larger drawdowns, typically 15 to 20%. Markets dislike uncertainty, so once the midterms resolve and the market knows who holds power and what legislation looks likely, the period afterward should be strong. A gridlock outcome, which looks likely, would be read as certainty. She says that if history holds, the market should be constructive heading into early 2027, with geopolitics and Fed hikes as wild cards.
“what we would expect is that we'll get through this, and then the six to twelve months after this mid term cycle should be quite bullish for the market because the uncertainty has been cleared.”at 9:37
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Enterprise AI adoption & AI software
AI agents are just starting; first movers like Muse won't win outright.
A reporter asked whether Muse would be the winner-takes-all company in AI agents, and she said absolutely not. The adoption of AI agents is only just starting. First movers typically do not keep the advantage, but they open the door for other companies to improve on the product and come to market.
“absolutely not. I mean, we're just starting to talk about AI agents and the adoption of them. Like, first movers typically don't have the advantage, but they open the door for other companies to improve and to come to market.”at 17:00
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Market concentration is not unprecedented; a handful of stocks always drive returns, and this time won't differ.
Even though the top ten S&P 500 names are more concentrated than ever, history shows that a handful of stocks usually drive index returns. Leaders have been cyclical, with the Nifty Fifty in the 1950s, tech in the 1980s, and telecom in the 1990s. The length of the current cycle is unknown and she argues the market is only starting to price it in. Microsoft is one of the few top-10 names that has held that position for more than a decade.
“even though we are more concentrated today than we ever have been from a top 10 names in the S and P 500, it's typically only a handful of companies that drive the return within the market.”at 19:14
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
AI infrastructure & data centers
Hyperscaler AI debt and circular neocloud financing echo past leverage-driven crises.
Hyperscalers have taken on more debt than ever. A year ago they had large free cash flow and piles of cash, but they have now shifted to negative free cash flow. AI financing issuance has reached about $450 billion year to date through Q3. Financial crises have usually involved leverage, and circular financing involving CoreWeave and other neocloud companies is starting to rhyme with past crises. She hopes the market prices this risk in.
“AI financing, I think we've seen about $450,000,000,000 of issuance year to date through the end of the third quarter.”at 20:44
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Market sentiment, positioning & volatility
VIX below 20 understates risk because index-level dispersion offsets large underlying drawdowns.
The VIX is sub-20, but that reflects heavy dispersion underneath the index, where names offset each other. Half or more of the index is in a meaningful drawdown or bear market, so the VIX cannot capture the volatility underneath. She says it is an inappropriate measure of the volatility the market is actually experiencing.
“So I don't even think the VIX is an appropriate measure to consider the types of volatility that we're seeing.”at 23:45
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Bonds no longer diversify equity risk since 2022, but yields now make them attractive for income.
Bonds have not diversified equity risk since 2022, which she attributes to positive stock-bond correlations in the current inflationary cycle. Bonds pay handsomely today, though, and may look more attractive than they have in fifteen-plus years. She argues they should be held for reliable income rather than for diversification, and that they should not be dropped from portfolios.
“bonds have not diversified equity risk since 2022. But guess what? Bonds pay pretty handsomely today.”at 24:17
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Buy-the-dip keeps working for now, but sharper, faster drawdowns are the new norm.
Policy support and trading activity keep buy-the-dip working, even though she expects it to stop at some point. Bear markets now move too quickly for investors to reposition, as the older long, drawn-out bear markets once allowed. Portfolios therefore need to be positioned at all times for sharp, sudden drawdowns, and she expects this environment to persist for some time.
“I think again, it's like the buy the dip mentality continues to work even though everyone agrees and myself included, like at some point it won't.”at 25:51
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
AI valuations are mellow near 19-20x earnings, unlike 1999, but an AI bubble could still form.
Compared with 1999, price and earnings multiples are not in bubble territory. Valuations are around 19 to 20 times earnings, which she calls pretty mellow to historical standards and not flashing red. The real risk is an earnings bubble. If AI companies' growth rate of change slows, the market will reprice, and she says the answer could be yes to whether a bubble occurs in the AI trade.
“Valuations are actually pretty relatively speaking and to historical standards, pretty mellow. I think we're looking at around, you know, 19, 20 times earnings.”at 29:00
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Stocks are priced for perfection; repricing comes when earnings growth decelerates, not from low levels.
Companies have delivered extraordinary year-on-year earnings growth, around 30%, yet their stocks have fallen about 3% on the news. She reads this as markets priced for perfection. The key variable is the rate of change of growth rather than the level, and the market reprices when that rate of change starts to slow. Multiples have compressed to levels that she does not see flashing red.
“the minute we see that rate of change start to slow is when it will be priced into these markets.”at 30:16
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
A few mega IPOs like SpaceX, Anthropic and OpenAI could matter more than 1999's 500 tech IPOs.
Over 500 technology companies came to market in the late-1990s IPO wave. Today there are fewer but far larger listings, such as SpaceX, with Anthropic and OpenAI on the horizon. Although they are few in number, their impact on the market could be far greater than the many small companies that listed in the late 1990s.
“We obviously have had some mega companies come to market like SpaceX and on the horizon here, Anthropic, OpenAI.”at 31:33
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Small caps are far less profitable than before; buying unprofitable high-beta names is unhealthy.
Around 40% of small-cap stocks now have negative earnings, against about 15% in the 1990s. Unprofitable high-beta small caps significantly outperformed profitable higher-quality companies at the start of the year, which she finds hard to square with a healthy, sustainable market. Small-cap premia can exist, but only with a quality component, and the small-cap factor is now in question. She reads the recent small-cap sell-off as a healthy correction.
“Today, that number's 40% of small cap stocks have negative earnings.”at 33:24
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Small caps lag because higher rates hit unprofitable, externally funded companies; a quality screen is needed.
Nardini argues higher rates explain the small-cap lag. Small caps rely more on external funding than large caps, which hold cash, and rates are much higher than over the last fifteen years. Many small caps are unprofitable, so their underperformance seems obvious. She recommends an active approach with a quality screen rather than wholesale selling of small caps.
“So rates are much higher today than they have been over the last fifteen years. And it's a bunch of companies that are unprofitable. It starts to seem kind of obvious why this part of the market has lagged meaningfully.”at 34:53
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
AI infrastructure & data centers
AI spending is shifting from hyperscalers to supply-chain bottleneck suppliers, which gain pricing power.
Nardini argues that the market has focused on hyperscalers and some chip companies, while the AI buildout needs many component pieces. The baton is starting to pass down the supply chain. Where demand exceeds supply, companies gain pricing power, higher margins and the ability to charge more, so the key question is which part of the bottleneck the trade rests on. She acknowledges this is still being figured out.
“I think we're in the midst of trying to figure this out. I think there's been so much excitement, and the baton just started to be handed from the hyperscalers down the supply chain.”at 35:55
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Semiconductors are inherently cyclical; the recent selling is a healthy repricing of over-trusted blue chips.
Nardini argues semiconductors have always been very cyclical and were volatile in the past. Once they were re-labelled as blue chips in the AI trade, investors took that for granted and bought the group indiscriminately. The early-Q4 selling and resurgent volatility are the consequences of that naivety, and she views the repricing as healthy.
“We forgot that this part of the market, semiconductors in particular, are very cyclical in nature... I think it's actually healthy that we're seeing a bit of this repricing.”at 38:04
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
AI infrastructure & data centers
The broader US AI data-center build-out is a huge opportunity, including power generation, giving AI beta plus industrial cyclicality.
The data-center build-out is not only an AI trade. Nardini argues the US has a huge opportunity to build and produce power sources that support daily life regardless of AI. Photonics and data-center infrastructure carry beta to the AI trade, so an infrastructure basket lets investors keep AI exposure while diversifying away from concentrated mega-cap and chip names, and adds a broader industrial cyclical angle. She presents this as TEMA's view.
“I would even go as far to say the broader infrastructure build out as it relates to AI data centers. We at TEMA actually view there's a huge opportunity just from a pure infrastructure play in The US that there's so much opportunity to build and produce power sources”at 39:25
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Real assets like energy, commodities and infrastructure are woefully under-owned and tethered to inflation.
Nardini says real assets (energy, commodities, infrastructure, inflation-linked holdings) are woefully under-owned. Her years advising advisors show portfolios containing only stocks, bonds and perhaps 5% gold. Despite four or five years of inflation, advisors have not adopted a meaningful inflation hedge. Commodities are a natural extension of her firm's thematic infrastructure work, since data centers need commodity inputs, and new commodity exposure products are coming within weeks.
“I think as an investor, having real asset exposure, exposure to energy, commodities, infrastructure, things that are inflation tethered are woefully under owned in most portfolios.”at 42:34
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
US grid underinvestment is coming due; regulated utilities with contractual cash flows look constructive.
Nardini argues the US has underinvested in infrastructure for several decades and that reckoning has arrived. The timing coincides with AI and the power needs of data centers, which is why the issue is now getting attention. Grid-building companies are often government entities or regulated utilities, and she is more constructive on that part of the market because they have contractual cash flows from regulated industries that support the buildout. She frames the need as true irrespective of AI.
“we're actually kind of more constructive on that part of the market because you have contractual cash flows from some of these regulatory industries that are helping support and build out this power play”at 44:31
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Private markets for individual investors
Pre-IPO exposure inside ETFs via SPVs is an exciting evolution for the industry.
Nardini says her firm holds pre-IPO exposure through SPVs in several ETFs. She argues this is a legitimate evolution, not a marketing gimmick, since positions are chosen on fundamentals and held after IPO. She adds that SPV costs are marked into the price, with no extra management or financing fees, and that a 15% non-daily-liquid limit under the 40 Act makes such structures permissible.
“I think this is an exciting part of the evolution of our industry.”at 49:26
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Space Exploration TechnologiesBullish
SpaceX is the leading space company; TEMA holds its pre-IPO exposure and kept it after IPO.
Nardini calls SpaceX the number one company when it comes to space innovation and exploration, the first name that comes to mind for the sector. TEMA's NASA ETF includes SPV exposure to SpaceX. TEMA did not sell SpaceX when it went public, since the firm makes longer-term strategic bets and typically holds companies after they list. Her firm therefore holds the stock in its funds.
“Obviously, SpaceX in particular, I think we can all agree as it relates to space innovation and exploration, SpaceX is the number one company that comes to mind.”at 50:45
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
The S&P 500 is not diversified; concentration leaves an effective count of only about 50 stocks.
Nardini says the S&P 500 is not diversified. Through increasing concentration in a few names, the effective number of stocks in the index is really only about 50, despite 500 holdings. Investors who think they get exposure to healthcare, industrials, technology and materials are mostly exposed to a handful of names, so people need to be more thoughtful about this.
“due to the fact that some of these names are so concentrated and have become increasingly concentrated, the effective number of stocks in the S and P five hundred is really only 50.”at 1:04:42
Excess Returns: The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen? ·
Shows
- Bloomberg Surveillance · 1 episode
- Excess Returns · 1 episode
Ask your AI what Paisley Nardini thinks
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