The Market's Playing Three Games At Once—And Nobody's Keeping Score Right

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The stock market just hit fresh records. Apple burned a $100 billion on buybacks. The S&P 500 is humming. And yet—something feels off.

Not wrong, exactly. Just… fractured. Like three separate bull markets are happening simultaneously, each with its own logic, and they’re pretending to be one coherent thing. That’s the actual story nobody’s talking about.

Let me connect the dots, because the headlines are screaming it if you know what to listen for.

AI Is Real, But It’s Becoming Obvious

JPMorgan’s Joyce Chang just confirmed what everyone with a Bloomberg terminal already knew: AI investment and spending are driving earnings growth right now. The data center build-out, cloud infrastructure expansion, the whole supply chain around it. This is genuinely moving the needle on corporate profits.

Here’s my problem with this narrative though: it’s becoming the only narrative. Apple and Broadcom are in “buy zones.” Markets are rewarding hardware and infrastructure plays. We’re 18 months into the AI cycle now, not 6 months. The easy money’s been made. When Chang says AI is “shaping the market,” what she’s really saying is that valuations in this sector have already priced in a lot of growth. That doesn’t make it a bad trade—it makes it a crowded one.

The risk isn’t that AI won’t matter. The risk is that everyone’s already positioned for it, and disappointment moves fast.

Photo by Vietnam Hidden Light / Pexels

Meanwhile, Oil Is Having Its Own Party

This is the weird bit. While everyone’s obsessing over chip stocks and cloud infrastructure, U.S. crude oil exports are surging to record levels. Why? The Iran war knocked Middle East supply offline, and suddenly American tankers are funneling crude out of the Gulf Coast like it’s 2008 again.

Trump’s already waving the flag about “freeing” ships stuck in the Strait of Hormuz. The geopolitical angle here is impossible to miss—and more importantly, it’s orthogonal to the AI trade. You can’t get AI exposure by buying energy stocks. You can get yield. You can get geopolitical upside. But it’s a different bet entirely.

The Amplify Natural Resources Dividend Income ETF (NDIV) has outperformed the S&P 500 year-to-date and yields 5%. That’s not a typo. While everyone’s piling into mega-cap AI plays trading at 30x forward earnings, a sleepy commodities ETF is quietly printing both capital appreciation and income. That should tell you something about where the edge actually is right now.

Energy dislocations created by supply shocks are one of the few things that move independently of Fed policy or earnings revisions. And they’re happening now.

The Buyback Game Is Getting Tired

Apple’s $100 billion buyback announcement was the fourth quarter equivalent of a fireworks show. Markets loved it. Stocks popped. Everyone felt better.

But here’s what nobody wants to say: we’re at the point in the cycle where massive buybacks are a sign of capital allocation desperation, not confidence. If Apple truly believed its core business had transcendent growth prospects, why return that cash to shareholders? You don’t buy back stock at record highs unless you think the stock is expensive and you’ve run out of better ideas for deploying capital.

I’m not saying Apple’s going to crater. I’m saying that when the biggest company in the world is spending nine figures to support its own stock price, we’re probably closer to the peak of this move than the beginning. Historically, that’s when the music gets quiet right before it stops.

Photo by Markus Spiske / Pexels

The Earnings Question Nobody’s Asking

Here’s what I genuinely don’t know: whether AI spending translates to earnings growth or just keeps capex elevated without margin expansion. There’s a difference. One drives stock prices higher. The other inflates balance sheets.

JPMorgan’s Chang is right that AI investment is happening. But investment isn’t earnings. And right now, valuations are assuming that the capex translates to profits. If it doesn’t—if we’re just building expensive infrastructure that gets commoditized in two years—the unwind could be violent.

FormFactor stock is up 350% in a year but got hammered this week. Why? Because the semiconductor equipment space is real, but it’s also cyclical. A company can be fundamentally sound and still get crushed when growth expectations reset.

That’s what I’m worried about. Not collapse. Correction. The difference between “down 15%” and “down 40%” is whether the market believes AI profits are real or just shiny capex.

What’s Actually Priced In

Oil surging on geopolitical disruption? That’s real and it’s happening. Energy plays have genuine, tactical upside for the next 6-12 months. The Strait of Hormuz stays closed, exports keep flowing, refiners print money.

AI driving the market? Sure, but it’s already priced in. Broadcom at these levels isn’t cheap. Apple at all-time highs isn’t screaming value. These are mature positions that need continued earnings beats to justify themselves.

Income hunters finding 5% yields in commodity ETFs while the S&P trades at elevated multiples? That’s actually interesting. That’s the trade that fewer people are crowded into.

My prediction: the next three months see continued upside in large-cap AI infrastructure plays—the momentum is real and the earnings are good enough to justify it. But by Q2, you’ll start seeing divergence. Energy stays strong because of geopolitics. Defensive yield-heavy plays outperform because people get nervous. And the AI darlings stall when Q1 earnings guidance gets… normal. Not bad, just normal.

The market isn’t broken. But it’s definitely not unified. Three trades masquerading as one bull market. Smart money starts rotating now. Everyone else figures it out in April.

What I’m Watching

• Strait of Hormuz status and Iranian escalation signals. If that waterway reopens even partially, oil takes a hit and energy stocks compress. That’s your signal that the geopolitical premium is coming out of the trade. Watch for any diplomatic movement in the next 60 days.

• Q1 earnings guidance language around AI capex ROI. Specifically: are companies talking about revenue from AI initiatives or just investment in AI infrastructure? The first means this keeps working. The second means disappointment’s coming. This matters more than the actual earnings beat.

• Broadcom and the semiconductor equipment complex in the next earnings cycle. If capex guidance gets pulled back even 5%, that’s your early warning that the AI buildout is moderating. FormFactor’s 350% gain tells you expectations are already stretched.

• NDIV and energy ETF relative performance vs. the S&P 500. If that gap keeps widening, it means smart money is genuinely rotating into yield and energy exposure. If it narrows, it means the AI trade is still sucking all the oxygen out of the room and risk-off hasn’t hit yet.