Market rise to "the feeling of year 2000"? Goldman Sachs partner: Calling the top is futile, perhaps we should embrace the bubble.

The surge in technology stocks and semiconductors is making Wall Street veterans smell a familiar scent. Goldman Sachs partner Rich Privorotsky bluntly stated in a recent client report that the current trend in US stock prices "has a hint of 2000", but the profit fundamentals behind this round of trends are much more solid than they were back then. His conclusion is intriguing: in the bubble-forming stage, "calling the top is futile", investors may be better off going long and embracing this process. This statement reflects the extreme excitement in the current market sentiment, and also reveals the unspeakable contradictory tension in the long and short game. Currently, the US stock market is in the state of "irrational exuberance" described by Privorotsky - bullish options skew has risen sharply, commodity trading advisor (CTA) strategies have all turned net long, and volatility control strategies are still mechanically providing support for buying. The core narrative driving all of this is the AI computing power represented by technology, semiconductors, and storage chips. South Korea's SK Hynix saw a 12% increase in a single day, becoming the most straightforward indicator of market sentiment. However, cracks are not absent beneath this feast. Privorotsky pointed out that there are hidden concerns in the consumer end, and the market breadth has fallen back to recent lows. At the same time, the situation in Iran is still uncertain, global inflation pressure is reigniting, and the probability of a UK economic recession in the betting market has exceeded 50% - these risks have not dissipated, but are temporarily overshadowed by the shine of the AI narrative. The semiconductor frenzy and the echoes of "2000" The core driving force of this round of market trends is the nearly infinite imagination space for AI computing power demand. Privorotsky stated that he has no objection to the general trend of AI agents driving long-term computing power demand, but he is more concerned with where the computing power will ultimately end up, and how marginal computing power costs will evolve. This question is not baseless. He pointed out that open-source models have rapidly gained market share in basic programming tasks, cost-sensitive users are showing a clear trend of cost reduction, and smaller models can now run smoothly on local CPUs to handle low-value tasks. If model compression technology continues to advance, the real question that the semiconductor industry needs to answer will no longer be whether computing power demand can grow, but how much demand will shift to cheaper distributed computing power - at which time supply may actually be able to catch up with demand. Nevertheless, before the bubble bursts, the market has its own logic. Privorotsky admitted that as a skeptic who is accustomed to thinking against the trend, he cannot help but imagine where things could go wrong, but he also acknowledges that in the current market structure, the cost of defying the trend is extremely high. Inflation and macro factors: the overlooked undercurrents In contrast to the hustle and bustle of semiconductors, pressures are quietly accumulating at the macro level. China's latest CPI and PPI data were both higher than expected, which Privorotsky sees as a "discomforting prelude" to this week's US CPI data. He pointed out that the deflationary impact in China is fading, and the focus is now shifting towards reflation, with inflation pressures heating up on multiple dimensions due to global restocking cycles and supply shocks in the product market. And with global fiscal deficits showing no signs of convergence, this combination is putting significant pressure on fixed income assets. As for Iran, Iran's response to the US peace proposal was deemed "unacceptable" by Trump, leading to a 4% overnight increase in oil prices. However, Privorotsky believes that both sides currently believe they have the upper hand, and there is limited desire for a real escalation, so the situation is more likely to continue drifting in stalemate. His concluding thought is tinged with a bit of dark humor: "Let's hope that memory chip prices continue to rise... because the energy situation seems far from being resolved."