The DeepStack Call · Part 10 · Markets
The Bubble Is in the Denominator
SkepticalCheap is conditional
The market is not cheap. It is capitalizing AI earnings before anyone knows who owns them.
ConvictionHigh
What to do with this
- Hold the 5.26% earnings yield (19.0 times earnings) against the 10-year: when the bond pays more, stocks offer no risk premium.
- Stress-test the 29.5% earnings growth for server lives and depreciation before you pay for it.
- Treat the $250 billion of hyperscaler bonds as competition for the savings that set the discount rate.
Next test · Oct 28, 2026Microsoft, Alphabet, Meta and Amazon report; depreciation, server lives and 29.5% growth will test the earnings denominator.