How AI Speculation Is Fueling the Small-Cap Stock Rally | WSJ’s Take On the Week

On this week’s episode of WSJ’s Take On the Week, host Miriam Gottfried and guest host Aaron Back, editor of WSJ’s Heard on the Street, preview the upcoming employment and inflation releases in advance of the Federal Open Market Committee’s September policy meeting. They analyze why these economic indicators will draw heightened focus under Federal Reserve Chairman Kevin Warsh. Then Miriam and Aaron dig into Nvidia’s recent blowout earnings and whether we will see that echo in Broadcom’s earnings this week. Next, Dan Rasmussen, founder and portfolio manager at Verdad Advisers, offers insight into the past year's small-cap stock surge following an extended period of underperformance relative to mega-caps. Rasmussen explains why private equity firms face a massive exit logjam from acquisitions of small companies due to inflated valuations. Finally, we ask Rasmussen: does value investing still work? Chapters: 01:00 - The week ahead: Jobs report and the Fed 03:31 - Nvidia's blowout earnings 05:14 - Circular financing and AI demand questions 07:20 - Broadcom earnings look-ahead 08:18 - Dan Rasmussen Interview 09:34 - Small Cap History 12:27 - The two small-cap markets: quality vs. junk 14:55 - Biotech's comeback 16:39 - Credit spreads and where we are in the cycle 21:24 - Private equity's exit logjam 23:24 - Russell 2000 vs. S&P SmallCap 600 25:01 - S&P 500 vs. total market index funds 27:50 - Does value investing still work? This is WSJ’s Take On the Week where co-hosts Telis Demos, writer for WSJ’s Heard on the Street, and Miriam Gottfried, WSJ’s investing and wealth management reporter, cut through the noise and dive into markets, the economy and finance—the big trades, key players and business news ahead. Have an idea for a future guest or episode? How can we better help you take on the week? We’d love to hear from you. Email the show at takeontheweek@wsj.com. 🎧 Prefer just the audio version? Subscribe and listen on Apple Podcasts, Spotify, Amazon Music, or wherever you get your podcasts: https://on.wsj.com/3LBGo5Q?mod=WSJ_TOTWPOD #WSJ #investing #Nvidia