So here's the thing about artificial intelligence: it's still running the show. That's according to Doug Clinton, founder and CEO of Intelligent Alpha, who laid out his AI investment thesis on CNBC's Squawk Box on Monday. He says the tech sector remains the key driver of broader markets, and AI isn't just a buzzword—it's a tool that could seriously improve how companies operate.
Think about it this way: Clinton argues companies in the S&P 500 could cut about 10% of their workforce today without slowing operations. And as AI models get better? Those potential reductions could rise to 20%–30%. That's efficiency on a scale that creates a long-term tailwind for margins and market growth. It's not about replacing humans for the sake of it; it's about doing more with less, which tends to be good for stock prices.
Now, where should investors put their money if they want to ride this wave? Clinton has two clear favorites in the public markets. First up: Nvidia. He calls it "the king"—and for good reason. Nvidia's chips power the inference work for major AI developers like OpenAI and Anthropic. When you're building the picks and shovels for a gold rush, you tend to do pretty well.
Second place goes to Alphabet's Google. Clinton says Google stands out as the leading publicly available AI model builder. If you want direct exposure to model development without diving into private markets, Google's your play. It's like getting a front-row seat to the actual AI creation process, not just the infrastructure supporting it.
But the really interesting part might be what's still private. Clinton points to SpaceX, OpenAI, and Anthropic as the companies that could reshape the entire AI landscape as they move closer to public markets. Take SpaceX: he thinks it could reach a $2 trillion valuation, driven by strong retail demand, limited float, and potential early index inclusion. That combination could create a squeeze dynamic that makes for some wild trading days.
Here's where it gets tricky. Clinton notes that trillion-dollar-scale IPOs might warrant faster index inclusion—these aren't your average startups. But markets have to balance timing and liquidity to ensure proper price discovery. The good news? Strong secondary-market activity already provides some valuation signals. The bad news? Going public at that scale is like landing a spaceship: you want to get it right the first time.
So there you have it. AI is still driving markets, Nvidia's wearing the crown, Google's building the brains, and the next wave of tech giants is waiting in the wings. The efficiency gains are real, the public picks are clear, and the private players could change everything when they decide to join the party.
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