Most S&P 500 companies resemble bonds as AI challenges corporate growth, Visser says

AI is eroding corporate competitive advantages and concentrating stock market growth opportunities in a handful of large companies, Jordi Visser said. Even leading technology businesses face enormous investment demands with uncertain payoffs.

Speaking with Anthony Pompliano in a discussion posted on Pompliano’s X account on November 7, Visser compared most S&P 500 companies to bonds and a small group to call options. He said his belief that corporate moats are disappearing also underpins his conviction in Bitcoin.

Visser recalled Mark Andreessen’s observation two years earlier that 492 companies in the S&P 500 were effectively bonds, while eight were call options. Visser endorsed the distinction: most businesses can continue generating cash without delivering strong growth, while a few offer the possibility of substantial gains.

He pointed to Ford and GM to distinguish companies that keep selling products from businesses with strong growth prospects. He questioned whether investors holding Ford over a decade should expect returns comparable to the S&P 500, arguing that businesses losing ground to AI face constraints on returns.

Businesses built around AI have an advantage over established companies, Visser said, but eventually encounter competition themselves after growing rapidly. He argued that AI would disrupt all companies and that existing businesses would struggle to reinvent themselves. He also said AI’s negative effects were beginning to emerge this year and expected them to intensify.

Visser said heavy spending requirements also create uncertainty for the largest technology companies. Referring to the Magnificent Seven, he argued that they are being pushed to commit enormous sums in pursuit of a payoff that may never materialize. Participation in the race to dominate AI, in his assessment, does not ensure investment returns.

He applied the same framework to Nebius and CoreWeave, saying he did not believe they could grow tenfold. He therefore viewed them as closer to bonds than call options, distinguishing exposure to the AI industry from the potential for substantial long-term growth.