AI earnings may determine which companies win, but interest rates could determine whether the broader market rises or falls.
The AI boom is no longer just about who can sell more GPUs or build more data centers. Investors are beginning to demand evidence of sustainable margins, stronger free cash flow and measurable returns on massive capital expenditure.
AMD's impressive growth is encouraging, but revenue growth alone cannot justify unlimited valuations.
Meanwhile, elevated Treasury yields could put pressure on high-growth stocks, even when their businesses remain fundamentally strong.
My view is that the next market rally needs two engines: resilient corporate earnings and a supportive interest-rate environment.
AI provides the long-term growth story, but the Fed controls much of the valuation equation.
In this market, growth attracts investors, profitability keeps them, and interest rates determine what they are willing to pay.
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