Finance
Larry McDonald Why Capital Is Starting to Rotate Out of Big Tech
Date: 2026-01-30 20:38:09
The AI boom has created one of the biggest market dislocations Larry McDonald has seen in decades.
In this keynote from the 2025 MoneyShow Masters Symposium Sarasota, the political risk expert and Bear Traps Report founder explains why trillions of dollars have crowded into Big Tech…while the resources needed to power AI remain dramatically underowned.
McDonald walks through the growing imbalance between the Nasdaq 100 and hard assets like natural gas, oil, copper, and power infrastructure. He connects AI-driven energy demand, data center buildouts, inflation pressure, and geopolitical risk to what he believes is a major capital rotation taking shape.
He also examines weakening consumer confidence, persistent inflation psychology, rising leverage, and why concentrated market leadership often marks the late stages of major cycles.
If you want to understand where institutional capital may move next as AI reshapes the global economy, this session lays out the risks and the opportunities.
About Larry McDonald
Larry McDonald is a political risk expert and founder of The Bear Traps Report, a research platform focused on global systemic risk and institutional investor positioning. He is also the best-selling author of A Colossal Failure of Common Sense and How to Listen When Markets Speak.
CHAPTERS
00:00 – The great market dislocation takes shape
03:15 – Nasdaq 100 growth vs. hard asset underinvestment
05:27 – Why AI needs energy, copper, and power infrastructure
06:40 – Institutional investors begin shifting toward hard assets
09:14 – Data center buildouts and the NIMBY problem
11:07 – China, rare earths, and geopolitical risk
12:29 – Consumer confidence in an inflation regime
14:11 – Why inflation psychology is hard to reverse
16:40 – Capital concentration and late-cycle warning signs
20:03 – The setup for a major rotation
25:50 – Portfolio lessons from past cycles
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