The AM Brief, Monday July 6, 2026 Part 1
Good morning,
It’s 8am in Miami and here is a recap of events that caught my eye. Part 1
The debate surrounding an "AI bubble" centers on whether elevated market optimism is driven by unsustainable stock prices or merely robust earnings forecasts. Current data shows the S&P 500 long term earnings growth forecast has reached a record 25.5%, supported by an explosive 43.5% growth outlook within the tech sector. Unlike the dot com era, where tech valuations peaked at 55x forward earnings, the sector currently trades at a more modest 22.2x. Market analysts suggest the current rally is driven by "fabulous earnings momentum" (FEMO), realized corporate profit growth rather than the "fear of missing out" (FOMO) that fueled previous valuation bubbles. The broader S&P 500 forward P/E ratio currently sits at approximately 20.4, which is above its 10 year average of 19.0, indicating that while stocks are not in a valuation bubble comparable to the 1990s, they are trading at a premium relative to their own historical norms.
SpaceX’s transition to the public markets in June 2026, raising a record $86 billion, serves as a prominent blueprint for future mega cap IPOs. By remaining private for over two decades, SpaceX allowed its business model and brand to reach massive, mature scales before facing public quarterly scrutiny. This strategy provides a potential template for other high growth, venture backed giants, suggesting that delaying IPOs until companies are fundamentally established can reshape global equity benchmarks.
The IPO was the largest in history and propelled Elon Musk to become the first trillionaire. Similar to OpenAI and Anthropic, SpaceX focused on achieving a leadership position and generating multi billion dollar revenue streams through long term private investment before transitioning.
The "Europe 2031" project is a speculative scenario report released by a coalition of researchers, think tankers, and investors that warns of Europe's potential decline into economic and political irrelevance due to systemic underinvestment in AI. The report argues that Europe currently controls only about 5% of global AI compute, compared to 80% in the U.S., and contends that the EU's €200 billion "InvestAI" pledge is insufficient and largely repackaged. Without a massive, concentrated shift toward building AI infrastructure and energy capacity, Europe risks becoming a permanent "vassal" to U.S. or Chinese technological interests by the end of the decade. The report advocates for an "AI Plan B," which includes creating specialized zones for compute infrastructure, forming coalitions with "AI middle powers" (such as the UK, Canada, Japan, and South Korea), and incentivizing American hyperscalers to build data centers within European borders to gain leverage.
Sources : CNBC, Bloomberg, Opening Bell, Epoch, Yardeni, Forbes, Rundown AI, Mario Nawfal, X
Thank you for reading
Live your best life,
AL Maulini
3
