Anthony Esposito Warns AI Rally Is Narrowing the Market as Consumers Brace for a Muted Holiday Season
In a wide-ranging interview, Ascalon VI Capital’s Anthony Esposito said the surge in artificial-intelligence stocks is increasingly distorting the broader market. He noted that the so-called “MAG7” now account for nearly 40% of the S&P 500’s gains, with Google’s explosive push into AI driving its market cap toward $4 trillion. Esposito warned that this concentration is becoming a structural issue, especially as tech giants shift chip-buying strategies — boosting some stocks while dragging down others like Nvidia. The key question, he said, is where real incremental growth will come from in an AI-saturated market.
The conversation then turned to holiday shopping. Richard Stern of the Heritage Foundation predicted decent consumer spending but not the blockbuster season retailers hoped for. He attributed the softer outlook to four years of steep prices under the Biden administration, which have weighed heavily on household budgets. Stern said recently passed tax cuts and deregulatory measures could improve energy costs and wages — but those benefits won’t arrive until next year.
Despite the tight economic climate, some brands are still seeing strong momentum. Esposito pointed to Gap’s surprise sales spike after a viral “Better in Denim” campaign featuring Cat’s Eye racked up more than 50 million YouTube views. He said the company’s mid-market staples — like Gap and Old Navy — are outperforming pricier labels such as Banana Republic, underscoring consumers’ shift toward value-focused shopping.
The segment closed on a lighter note as Krispy Kreme introduced a new holiday collaboration with the Peanuts characters. Both guests said the nostalgia-driven marketing is smart and well-timed, offering a cheerful boost heading into Thanksgiving. Esposito and Stern wrapped up the interview wishing viewers a happy holiday season.
