🌐 Reflections from the Ark: From Drums to Bubbles 🌐
Iran dominates the headlines. But in the financial markets, a parallel story is unfolding.
As the conflict in #WallStreet grows, so does the suspicion that this is acting as an unexpected lifeline for the tech bubble.
Expensive oil keeps inflation high and forces the Federal Reserve to maintain high rates. Under normal circumstances, that scenario would have started to deflate the exaggerated valuations in the tech sector.
However, as Trump needs to predict that the crisis will be brief, rates remain firm without triggering an immediate collapse. This time margin allows the AI bubble to continue floating.
With solid balance sheets and minimal direct exposure to the Middle East, companies like Amazon, Microsoft, or Google have become one of the few places where investors feel relatively safe.
It is no coincidence that the so-called "Magnificent Seven" contributed nearly half of the S&P 500's return in 2025.
But the conflict is directly driving the demand for military systems based on AI. The CEO of Palantir has said it openly: this technology gives the West a decisive advantage.
At the same time, major cloud service providers are supplying critical infrastructure to the Pentagon, to the point that AWS facilities in the Gulf have already been attacked by Iran.
The unknown is what will happen if the war drags on, threatening to halt ambitious AI investment plans from Gulf countries, and with oil tanker traffic plummeting, the global economy is dangerously approaching recession territory.
For now, war and artificial intelligence advance intertwined, maintaining a fragile balance that markets are watching with increasing unease.
No bubble, no matter how resilient it seems, survives such a scenario.