We just got through the worst quarter for stocks since 2022, with investors hiding out in the “HALO trade” while they abandoned tech. But AI is back in the spotlight today, reminding everyone it’s still very much alive and well.

Take a look at these three headlines proving there’s still plenty of life left in the ol’ AI trade:

• Broadcom: Shares rebounded 6.21% after a slow start to the year, following a new deal to create AI chips for Google and an expanded partnership with Anthropic.
• Samsung: Posted blowout Q1 results, with profits surging 700% on strong memory demand. Shares rose 1.76% this afternoon.
• ASML: Shares eked out a 0.19% gain after new US restrictions on selling semiconductors to China threatened the company’s already-weak sales outlook in the region.

Goldman’s bullish case

With headlines whipping tech stocks around day to day, and value stocks crushing their growth counterparts last quarter, it’s hard to tell what the right move is. But Goldman Sachs has found a signal in all that noise: After the tech sector posted its weakest relative returns in 50 years, it’s time to buy the dip.

To be fair, investors’ concerns aren’t entirely unfounded. Hyperscalers are pouring record levels of capex into AI, while software companies face growing disruption risks. But Goldman argues the market has overcorrected: Globally, the IT sector is now trading at a lower P/E than consumer discretionary, staples, and industrials, even as Goldman expects IT earnings to grow 44% this quarter versus just 12% for the S&P 500. The result is a record gap between weak stock performance and strong underlying earnings growth that Goldman says investors should take advantage of.

Beyond that valuation disconnect, Goldman sees the Iran war as a longer-term positive catalyst for tech. The conflict has pushed expectations of inflation and rates higher, weighing on valuations in the short term—but that pullback has made the tech sector more attractively priced. If the shock eventually slows growth and caps yields, tech’s stable cash flows could drive outperformance.

Finally, Goldman argues that, contrary to popular belief, the tech sector doesn’t resemble a bubble. Valuations are relatively restrained, and the kind of speculative frenzy typically seen in bubbles—such as a tsunami of IPOs—is largely absent.

The bottom line: Goldman is clearly bullish on tech. But with geopolitics, interest rates, and domestic policy all in flux, the question is whether this is actually the dip to buy—or just another bump in a very choppy market.—SY

🟢 What’s up

• Universal Music Group rose 11.4% after Bill Ackman’s Pershing Square made a fresh bid for the company.
• Humana jumped 7.9%, UnitedHealth rose 9.37%, and CVS Health rallied 6.74% after the government boosted 2027 Medicare Advantage rates.
• Arista Networks popped 5.85% following an upgrade to Buy from Rosenblatt analysts, driven by optimism around its AI data center strategy and hyperscaler ties.
• Paramount Skydance climbed 10.66% after confirming major sovereign wealth backing for its Warner Bros. Discovery takeover.
• Intel gained 4.19% after announcing plans to join Elon Musk’s Terafab AI chip project alongside SpaceX and Tesla.
• Avis Budget Group rallied 20.01% thanks to a short squeeze.

What’s down

• Apple slipped 2.07% thanks to reports of engineering setbacks delaying its foldable iPhone.
• Arm Holdings fell 3.3% after Morgan Stanley downgraded the stock, citing risks around its shift into selling its own CPUs.
• Tractor Supply dipped 3.86% as BofA flagged pressure from higher fuel costs and weaker discretionary spending on big-ticket items.
• Taser-maker Axon Enterprises sank 9.73% after investors were not impressed with the company’s new AI-powered tools.

You might want to pack light for your next vacation. Today, Delta Air Lines announced it’s raising fees for checked bags, charging an extra $10 for your first checked bag. It joins rivals United Airlines and JetBlue Airways, both of which hiked their checked bag prices last week. Delta sank 1.74% this afternoon.

The reason for these moves is clear: Crude oil prices have surged nearly 50% since the war in Iran began, which means higher fuel costs for airlines. In fact, Barron’s estimates that jet fuel is 70% more expensive now than at the end of February.

That’s a problem for all airlines, though domestic carriers are better insulated than their international peers, since the US produces a lot of its own jet fuel. But any planes flying from the US to international destinations will have to refuel abroad, which means a higher price tag—not just because longer overseas flights means planes need more fuel, but also because oil shortages have already hit international markets, while the hammer has not yet dropped here in the US.

If a bigger baggage fee is bad news for flyers, it’s worse for carriers. Companies are well aware that higher prices could turn away potential customers, and the fewer people who travel, the more routes airlines will need to cut in order to reduce expenses—just as the key summer travel season begins. Not to mention that higher prices at the pump—and everywhere else the oil shock pushes inflation up—could mean consumers are less eager to shell out for travel.

Delta Air Lines reports earnings tomorrow morning, and suffice it to say investors will be listening closely for signs that higher baggage fees are just the beginning of a very turbulent summer for airlines.—MR

One more job title could soon be joining the graveyard of careers AI is making obsolete: Wall Street analyst.

ProCap Financial, a financial services company run by entrepreneur, investor, and crypto influencer Anthony Pompliano, is launching a new product that will distribute AI-generated research reports for retail traders, the WSJ first reported today. The service, ProCap Insights, will cost $2,500 per year and can potentially produce hundreds of notes a day on companies across the market.

ProCap Financial’s Chief Market Strategist Phil Rosen, who is also the one and only employee overseeing the product, argued that with the right prompting, AI agents can scour the markets, analyze trends, and come up with investment ideas at a far faster pace than flesh and blood analysts.

But, he said, there’s still a human component. Rosen will oversee and read the analyst reports, and, he argues, the strategy works better than anyone just asking ChatGPT for stock picks because of his and Anthony’s years of (very human) experience in markets.

“There are AI agents that are acting to do the research, debate each other, pressure test ideas and views on the market and views on different trade ideas, and then I’m the editorial or human overlay on that,” Rosen explained.

Can AI replace years of experience, relationships with a company, and a gut feeling that many analysts incorporate into their research? That remains to be seen.

Shares of ProCap Financial fell 1.58% today after the announcement.

Would you trust AI with your money?

ProCap Financial isn’t the only company capitalizing on the fact that more and more people are using various forms of AI to help them make decisions about their money.

Earlier this month, Public became the first brokerage to launch a platform that allows investors to create their own tailor-made stock indexes with AI, and rolled out tools to allow users to automate tasks like buying the dip of certain stocks, or giving tax-loss harvesting advice.

Despite the financial industry’s embrace of the new tech, many investors are still wary of trusting AI completely. After all, investing and money management are deeply personal, and often emotional, tasks. Then again, traders may be willing to accept some automation to help them get to the next level—or, as Pompliano told us, “retail investors want to make money.”—LB

• Take a look at all the sneaky ways the Iran war is making things more expensive.
• Goldman Sachs said its private credit fund narrowly escaped the private credit bloodbath—and that it has plans to take advantage of the recent market chaos.
• Driving profits: Used car prices just rose to their highest since summer 2023.
• Yikes: The dividend yield on the S&P 500 is now the lowest in 50 years.
• Fed president Austan Goolsbee warned that the war in Iran is going to push inflation higher, force growth to slow, and basically make the market’s stagflation nightmares a reality.
• Here’s why so many people are exiting the job market, pushing labor force participation to its lowest level since 1977.

Ladies and gentlemen, we are pleased to present the winner of our one-month, March-only, Fantasy Investing League: Aaron A.

Kudos to Aaron for turning $100,000 into $900,587 in a mere month, with just 115 trades. Most of those moves were focused on small-caps like Mega Fortune Co. and Swarmer, as well as micro-caps such as WeShop Holdings, with nano-cap stocks like Sky Quarry and 3E Network Technology Group sprinkled in for good measure. Aaron had a penchant for shorting these stocks at just the right moment, never fretting about bailing on a position even just a few minutes after opening it.

While such high-frequency trading may not mimic real-life conditions, and while archrival/runner-up Griffin F. has lobbed some serious allegations against our champion in the comments section, Aaron played the game well and has earned a variety of Morning Brew swag for his troubles.

Kudos to all of our contenders for participating in our first month-long market matchup. We’ll take a short break for April, but keep an eye out for our next community contest for your chance to win fame, (fake) fortune, and fabulous prices!

Economic reports: The focus is on the Fed tomorrow, when we’ll get a peek at the minutes from the last FOMC meeting. We’ll also hear from San Francisco Fed President Mary Daly.

Earnings announcements: Delta Air Lines, Applied Digital, and Constellation Brands headline a sparse slate of reports.