Going from one trillion to three trillion is a story, but to...

Going from one trillion to three trillion is a story, but to climb further to a market capitalization of six trillion US dollars (doubling again), it still requires that end-market users benefit, rather than it being simply a capital expenditure game for those selling shovels.

Currently, among the companies tracked by the $Russell 2000 ETF - iShares (IWM)$, there are no direct beneficiaries of AI whose profits have increased. According to the linear extrapolation of the most recent quarter to the consensus revenue forecast for 2027 by FactSet, it's over 180 billion US dollars, and it assumes a net profit margin close to the current one. Under generally accepted accounting principles, the earnings per share would be around 4 US dollars, which would already be a forward price-to-earnings ratio of over 30.

If any of these assumptions go wrong (linear extrapolation of growth not materializing, the industry experiencing cycles, AI technology bottlenecks, the emergence of competitive products that cannot maintain the current profit margin), the odds for the bulls are very poor.