My Investing Muse (25Aug25)
Layoffs & Closure news
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Store closings in 2025 have totalled about 5,822 as of June 27, significantly surpassing last year's mid-year total of 3,496, Coresight Research reported. - The Street
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You survived the layoffs. Now you’re doing 2 people’s jobs. Attrition follows a Layoff. How fast can the slump follow?
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Meta is freezing all AI hiring, per WSJ. This comes just days after Meta offered compensation packages exceeding $100M for some AI engineer hires.
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Microsoft, Meta, Amazon, Google: $320B planned to spend this year on AI. MIT: 95% of companies saw zero returns. Zuck just burned $31.8B in 6 months and is hitting the brakes. Now even the CEOs who lit the fire are yelling “bubble.” Ya don't say? Insiders are finally pre-warning about this now… glad they caught up. There will be some epic movies made from this time period. - X user Amanda Goodall
There have been 446 corporate bankruptcies year-to-date, the most in 15 YEARS. Among sectors, Industrials and Consumer Discretionary have been the most hit with 70 and 61 filings, respectively. - X user Global Markets Investor
The above are some news items about layoffs and closures. As tariff negotiations drag on, the collateral to businesses (especially smaller ones) can compound.
The Rise and Fall of AI
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AI will lead the way and will be a major proponent of the market. However, many AI companies would not make it. From Artificial Intelligence to Artificial investments? Not every AI company is created equal.
Does America have an adequate energy infrastructure to support the AI boom?
Energy
NYT: The Trump administration on Friday ordered that all construction stop on Revolution Wind, a $4 billion wind farm off the coast of Rhode Island that is already mostly built. Matthew Giacona, the acting director of the Bureau of Ocean Energy Management, issued a letter on Friday to Orsted, the Danish company building the wind farm, ordering it to “halt all ongoing activities” because of unspecified issues. - X user Republicans against Trump
Texas Is Preparing To Cut Off Power To Data Centres During Grid Emergencies - Zerohedge
Will (a lack of) energy and infrastructure be America's greatest enemies?
My final thoughts
The release of the Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, will be a key event in the coming week as the central bank navigates its interest rate decisions.
In the AI sector, a shift is being observed in manpower hiring. While companies like OpenAI have demonstrated significant technological advancements, the business has operated at a considerable loss despite major investments. For instance, OpenAI projected a cumulative loss of $14 billion by 2026. This has raised questions about profitability in the industry, even as companies like Google are seen by some as leading the AI race.
The landscape of global AI development, however, is not fully transparent. China, for example, is making rapid progress, and its AI ecosystem benefits from a large population which provides vast datasets for training models. China is the world's largest producer of AI talent, and Chinese companies are rapidly closing the gap in AI research and development. This enables the development of AI models at a greater speed and scale.
Let us review our expenditures, income, and savings. Let us spend within our means, invest with what we can afford to lose, and avoid leverage. I am reviewing my holdings and plan to cut losses with businesses losing their competitive advantages. I would also consider hedging and adding some defensive positions.
Let us conduct our due diligence before taking on any positions. Let us have a successful week ahead.
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