“I think AI is kind of in the similar spaces we saw back in the internet bubble. The internet bubble came and everything got overpriced. And while the internet has revolutionized the world, it still took a good five years, 10 years for it to really turn into something big. And so AI has just popped up. It's a feeding frenzy. Everything's a little overvalued and companies aren't really turning it into massive profits yet compared to what they're spending on it.”
The David Lin Report · October 2026
Context
Asked why Google and Intel were punished so hard on earnings misses, the market strategist says investors are fixated on AI spending that hasn't yet produced profit. He compares AI to the early internet: transformative but slow to pay off.
Transcript
…the market because technically it's still in a bull market. It's still rising. We step aside when the market goes sideways, pulls back, and then we re-enter when it starts another leg higher. So that's kind of where we're at. We need to see proof. We need to see price firm up before we take action.
…yesterday, like 28% today. Like, you know, these are, this isn't the market just saying, oh, let's reprice some stuff. This is like a panic fire sell almost type of event for these large companies. They're trading almost like penny stocks would, but they're not. It's Intel, right? Yeah, I know.
When you look at Intel, I mean, it's down 30.4%, 30.5% today alone. But here's the thing. I think a lot of people, there's been nothing but talk of AI for the last several months. The whole stock market has gone sideways since May. And that is because there's fear of AI destroying humankind. There's fear of people just overspending that were in a budget. People are worried about companies not actually turning a profit with the AI, which Google is a perfect example. They're spending money on AI and it's actually hurting the rest of their business. It's actually hurting their search. So, you know, it's cutting them twice as deep or doing a lot of damage. So people are super sensitive right now when it comes to what these companies are spending their money on. You know, you look at some of these reports. Some investors are getting really, really ticked off with how much spending is going into AI and it's not turning into a profit at this point. And I think AI is kind of in the similar spaces we saw back in the internet bubble. The internet bubble came and everything went, got overpriced. And while the internet has revolutionized the world, it still took like a good five years, 10 years for it to really turn into something big. And so AI has just…
If, let's say, analysts have to revise down their expectations for the coming quarters, what does that mean for the markets? Because Google's earning EPS beat was like, I'll give you the number exactly. I have it written down here. It was 30% off. It wasn't like a couple percent off. It was like…
Well, it's not good. I mean, there's a big cycle that starts to come. Investors start to go, hey, if people are starting to trim back the earnings, that's not a good sign. That means the momentum is, we're losing momentum. The whole AI space is pure. It's a momentum move. Everybody's piled in. It…
Keep that chart on the screen, please, the Intel chart. Okay. So let's suppose you weren't following the AI story. You look at a chart like that, and my immediate reaction is, okay, either the company's collapsing literally, or now that I'm putting the pieces together, it's not just Intel. It's a…
More from The David Lin Report
