Joseph Mezrich

If you want to see where AI may affect jobs first, the stock market may already be pointing to the answer. It shows up in a simple metric: sales per employee. AI adoption can increase productivity with fewer employees, which is one reason many companies are reducing headcount. Yet the market is selective about where it believes these headcount reductions will be beneficial. Technology companies are the epicenter of AI deployment, and the market’s reaction to job cuts differs sharply between...

A key point often missed in the debate over whether tech stocks — and the broader market — are in a bubble is that an important segment of tech is clearly not. Tech hardware stocks, in particular, have clearly underperformed. Using equal-weighted, weekly-rebalanced portfolios over the past three years, the top 500 market-cap stocks returned 13% annualized (12% YTD). The equal-weighted tech sector within this universe delivered a 25% annualized return (20% YTD). By contrast, the tech-hardware...

October’s layoffs were the worst in twenty years, and a significant portion can be traced to companies accelerating their adoption of artificial intelligence. The cuts have continued. How should investors interpret this? On one hand, the surge in layoffs signals stress for workers and potential headwinds for the broader economy. Combined with massive AI-related Capex that has not yet translated into higher profits, the near-term picture can look troubling. On the other hand, the layoffs may...