David Woo — The AI Bubble, Real Yields, and Why Gold Sold Off

This is the big gold ETF — owning it is basically owning gold. Woo's actual trade is "long-dated gold calls": cheap options that pay off if gold's price is much higher a year or more from now, with limited downside if it isn't. It's a bet placed well in advance, not a rush to buy gold today.

The logic is a hedge against the AI mania popping. Right now soaring tech stocks make people feel rich, and that "feel rich" effect is part of what's pushed bond yields up and kept gold out of favor. If the AI trade unravels, that reverses fast and scared money runs back to safe havens like gold — so he wants the bet on cheaply, ahead of time.

Exxon is the giant US oil company. Woo isn't recommending the stock — he's quoting a senior Exxon executive as evidence for his oil view. That executive warned that if oil inventories stay this depleted, crude could spike to $150–160 a barrel within weeks.

With the Strait of Hormuz (the world's busiest oil shipping chokepoint) shut and Iran walking away from talks, Woo thinks oil is more likely to keep rising than fall — and the Exxon comment is one of his supporting data points.

Microsoft is one of the five "hyperscalers" — the cloud giants spending enormous sums building AI data centers. Woo's key warning sign: their combined spending on this gear actually fell in Q1 versus the previous quarter, hinting the AI buildout is cooling.

He also flags a Microsoft-specific clue: it reportedly canceled most of its Claude Code licenses as rival coding tools (its own Copilot, plus Cursor and OpenAI's Codex) caught up — a sign the AI leaders' fast growth may not last.

Amazon is cited only as one of the five cloud giants whose combined AI spending dropped quarter-over-quarter. Woo isn't judging the stock — he uses Amazon's spending as part of the evidence that the AI investment boom is starting to decelerate.

Alphabet (Google's parent) is another of the five cloud giants in Woo's spending tally. Their combined AI-infrastructure spending fell versus the prior quarter and grew more slowly year-over-year — his evidence that the AI buildout's momentum is fading, not a call on the stock itself.

Meta (Facebook/Instagram) is included only as one of the five big spenders whose combined AI data-center outlays slipped in Q1. Woo points to the group's falling spend as a signal that the AI-driven boost to the economy may be losing steam.

Oracle rounds out Woo's five cloud giants. Beyond the group's spending dropping versus last quarter, he notes memory-chip prices jumped — so the amount of actual hardware bought probably fell even more than the dollar figures suggest. Again, evidence for the cooling-AI thesis rather than a stock view.

Uber appears as a real-world example of AI spending hitting a budget wall. "Tokens" are the units companies pay for when they use AI models — the more you use, the more you pay. Uber's CEO said the company burned through its entire yearly AI budget in just four months and is now capping usage.

Woo's point: companies are shifting from "throw money at AI and experiment" to "watch the bill carefully." If that's widespread, the AI providers' explosive growth could slow — a crack in the AI trade he's worried about.

Cursor is a privately held AI coding tool. Woo names it (alongside GitHub Copilot and OpenAI's Codex) as a fast-rising rival closing in on Anthropic's Claude Code. The takeaway: the AI-coding market is getting crowded, which threatens the pricing power and growth of the current leaders.

QQQ is the fund that tracks the Nasdaq 100 — basically the big tech index, and Woo's stand-in for "the AI trade." It has jumped more than 20% since the April Claude release.

His worry is that the bet has gotten "crowded" — too many investors piled into the same trade, with few fresh reasons for it to keep climbing and the rally now led by fewer and fewer names. When a trade is that one-sided, the bigger surprise tends to be a drop, so he sees the risk now tilting downward.

Anthropic is the private AI company behind Claude, heading toward a stock-market debut (IPO) later this year. Woo sees two problems. First, the genuinely useful, widely accessible abilities of top AI models are "plateauing" — improving in small steps rather than leaps — which makes it harder to keep charging more.

Second, competition is catching up to its Claude Code product, and Microsoft reportedly dropped most of its licenses. Together with customers reining in AI budgets, that suggests Anthropic's recent breakneck growth may not hold — an awkward backdrop for an IPO.

OpenAI is the private maker of ChatGPT and the Codex coding tool, also reportedly headed for an IPO this year. Woo's concern mirrors Anthropic's: the most useful, broadly available AI capabilities are leveling off, which is the central challenge for these companies as they try to justify huge valuations to public investors.

Intel is a major chipmaker. Woo doesn't dig into the company — he just notes that Intel's stock (along with AMD and Broadcom) has "lost momentum," meaning its price has stopped pushing higher. He reads that as the AI rally narrowing to fewer winners, a warning sign that the broad AI trade is tiring.

AMD is another big chipmaker. As with Intel, Woo cites it only as a stock that has stopped climbing — fading leadership among the chip names that drove the AI rally. It's technical evidence the rally is losing breadth, not a fundamental view on AMD.

Broadcom is a key AI-chip supplier. Woo groups it with Intel and AMD as names that have "lost momentum" — once-leading chip stocks that have stalled. The point is that the AI rally's leadership is thinning out, reinforcing his view that the trade is crowded and vulnerable.