Veritone

The growth to value rotation is becoming one of the most fascinating things in the market when you really read how fund managers are discussing it.

I'm going through $Deere(DE.US) Deere Q1 earnings.

It's seen as an industrial part of the stock market.

Sales are up 13% YoY. Net income is down 25% YoY. Operating profit is down 59% YoY.

This stock trades at 35x earnings and is up 42% YTD.

One fund manager who owns it from Gamco Investors:

"It is important to note that companies like Deere make 'things,' tangible items that cannot be disintermediated by AI."

Really? That's why you're paying 35x earnings for a company with declining EPS growth? Because they make 'THINGS' that are physical?

$Deere(DE.US) is a great company and deserves a multiple but we are at the stage of this market where there is so much concern over AI commoditizing everything that now fund managers are plowing into companies that make physical things for the sake of not being in a sector that AI can replace.

I think eventually this market wakes up and says that paying that much for negative growth does not make sense, AI is not going to destroy every sector alive, and worst case -- if AI is actually eating the world, then $NVIDIA(NVDA.US) should be much, much higher than now because all of that demand will come right back to the epicenter of AI.

Verizon, Coke, Deere...all being preferred for negative/low growth vs $Meta Platforms(META.US), $Alphabet(GOOGL.US), $Amazon(AMZN.US).

Have no idea when but it does feel like things will eventually flip.

Source: amit