Foreign media: Macro investor Raoul Pal believes the current market is being driven by two forces simultaneously: rising asset prices due to currency depreciation, and rapidly growing profits from AI companies. He says traditional recession models can no longer adequately explain this divergence.
The economy is splitting into two tracks.
Pal believes that industrial production and traditional economic activities are still slowing, but AI and the intelligent economy are expanding at a faster pace. He says that the previous framework, which relied on indicators like the ISM to judge recessions, no longer captures the full scope of the economy.
This divergence also explains why several recent recession forecasts have not materialized. Pal said that traditional models saw weakness in manufacturing but failed to capture the strong growth in AI-related businesses.
Anthropic is used as an example.
Pal mentioned Anthropic, calling the company's revenue growth rate "unprecedented." He said that Anthropic grew from nearly no revenue to nearly $100 billion in about three years, with most of that increase occurring in the past year.
He believes this growth rate is changing how the market views valuation and profitability. AI companies are no longer just telling growth stories—they are beginning to directly impact financial results.
Why is the stock price continuing to rise?
Pal also said that currency depreciation typically leads to a long-term rise in asset prices, such as stocks. In the past, corporate earnings growth often followed GDP changes slowly, but AI companies are breaking this pattern.
In his view, the combination of currency depreciation and AI-driven profits "rising vertically" is creating a market environment unlike any previous cycle.