Caroline Hyde

Look, investors are looking to NVIDIA for some sort of fresh clues on the AI market's impact.

Our next guest warns the biggest risk to equities is a breakdown in the AI trade.

Martin Norton, chief investment strategist at Empower, saying that if there's clear evidence that AI won't be as transformative as expected, it could undermine a major growth engine for both the U.S.

economy and equity markets.

But at the moment, Marta, everyone's worrying that it's too effective.

The bullishness has become bearishness.

Where do you sit on that?

I mean, it feels as though when we look at AI, everything is a loser.

Investors have lost confidence in the epicenter of the AI trade, the hyperscalers, NVIDIA, Meta.

And at the same time, they're questioning how effective and how profound AI will be in disrupting all these other industries.

So we're kind of in a contradictory phase when it comes to AI at the moment.

I do think this opens up opportunity.

I think it opens up opportunity among the AI community.

AI A-list names.

And I also think it opens up opportunity in some of these disrupted industries.

When you say opportunity, you mean start to catch the falling knife, start to perhaps add to your investments in companies that are beaten up?

Yes, absolutely.

And the falling knife narrative is especially important because it is a bit dangerous.

We are looking at a transformative technology and we don't exactly understand what that terminal value looks like because we don't understand how these business models will completely evolve.

But I think if we have a base case expectation that we're seeing AI integration, then I think you can think of some of these companies as maybe survivors or even thrivers.