Transcription of the video “Navigating the AI market wave"

[Jean-François Robin, Global Head Of Natixis CIB RESEARCH speaks in front of the camera] :  

"A new season is coming, and the big question mark is how well companies are sailing through this perfect storm that we see these days: energy crisis, tariff war, Iran that is not over and far from it, etc. But we still expect earnings per share to show magnificent numbers, if I may say so.So this is going to be crucial to see how good these companies are sailing through all this. Earnings per share are still expected to be in double digit, probably more than 30%, and that all comes down to this big question mark of monetization of AI. These days, we see that the valuation is not that much a trouble, because you have probably 27 or 28 times the earnings, compared to 70 or 80 at the dot-com bubble moment.So it's kind of reassuring, but we have all these question marks regarding the component of that, with the big increase in CapEx - we’re talking about 600, 700 billion of CapEx this year. As a result, you see negative free cash flow everywhere coming from those 5 or 7 big tech companies, and that starts to question a little bit the model.On top of that, you have the impact on the bond market, so not only you have this sovereign crisis with rates at the highest since 2002, 2007, 1996 in Japan. But on top of that, you start to see a little bit of, not cracks, but questions regarding the bond market when you have hyperscalers taking close to 10% of the investment-grade market in the US. Not that much a trouble for Europe. But if you look at the CHF market, for instance, we are talking about 30% of the market which is used by the big tech companies to issue debt to finance this CapEx. So big question mark around this new season of results, which is coming now. And we are going to know a little bit more how well these companies are sailing through the storm."