"The Federal Reserve's unique transitional situation could also foster volatility through 2028 [and] damage to institutions like NATO and OPEC could catalyze new destabilizers. Investors can be forgiven for ebullience around tech earnings and an exciting future, but dismissing macro factors with potentially long-lasting implications strikes us as brash."
"Most investors appear confident that the GenAI-capex story can compound almost regardless of the macro backdrop, while seemingly dismissing variables experiencing clear trend breakouts (oil, inflation, rates, Fed policy, the US dollar) as transitory noise."
"Among those variables labeled 'temporary,' we see potential for headwinds to last longer than discounted, with oil supply disruption a case in point."
"Supermicro will report fiscal Q3 earnings today and investors will get a progress report on CEO Charles Liang's promise that the server manufacturing company could hit $40 billion in revenue this fiscal year."
Political risks and macroeconomic factors may disrupt positive earnings trends, according to Morgan Stanley's Lisa Shalett. She warns that the Federal Reserve's situation could lead to volatility through 2028. Investors are overly confident in the GenAI-capex narrative, dismissing significant macro variables as temporary. Shalett suggests that assumptions about the durability of current trends may be flawed. Supermicro's upcoming earnings call is overshadowed by a legal probe involving its co-founder, which could have severe implications for the company's future revenue goals.
Read at Fortune
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