Warren Pies: "I’m Scared Out of My Mind… But Very Bullish"

Why It Matters

AI‑driven compute scarcity is reshaping earnings expectations, making the market resilient to oil‑related shocks and redefining the primary catalyst for equity performance.

Summary

The interview with Warren Pies, founder of 314 Research, centers on why the U.S. equity market remains bullish despite a historic oil supply disruption in the Strait of Hormuz. Pies argues that two opposing forces – a tightening oil market and an explosive AI-driven compute demand – are battling for investor sentiment, and the AI side is clearly winning.

Pies points to his proprietary GPU‑availability data, which showed a sharp collapse in supply in March, signaling a scramble for compute power. That scarcity, combined with the "mythos" leak of advanced frontier models, has spurred a wave of AI capex that is feeding higher earnings expectations. He notes that earnings‑estimate revisions are up 11% year‑to‑date at the index level and a staggering 25% over the past 252 trading days, driven largely by semiconductor and oil firms.

Critics worry the earnings boost is “lumpy,” concentrated in high‑bandwidth memory makers like Micron and energy majors. Pies counters that while the top‑heavy nature is evident, the median stock’s earnings‑estimate growth is also at record levels, indicating a broader underlying expansion. Historical analysis shows similar concentration patterns during early‑ and mid‑cycle phases, not just at market peaks.

The implication is clear: AI‑related capex is the new north star for the market, and as long as compute demand and model performance continue to improve, equity valuations can stay elevated despite geopolitical oil risks. Investors should monitor GPU supply dynamics and AI model breakthroughs as leading indicators of future earnings momentum.

Original Description

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In this episode, Warren Pies, founder of 314 Research and Caliban, joins the show to analyze the "two wolves" currently battling for control of the market: the transformative power of AI and the historic oil crisis in the Strait of Hormuz. Pies details how an "agentic explosion" in AI and a massive scramble for compute are fueling an unprecedented earnings boom, with proprietary data showing that frontier models like Mythos are driving a legitimate, if lopsided, market advance. On the flip side, we explore the terrifying 10-million-barrel-per-day oil deficit caused by geopolitical blockades and why "managed demand destruction" has been the only force keeping prices from skyrocketing past $200. Despite these risks, Warren remains fundamentally bullish on equities, arguing that the AI-driven CapEx cycle and resilient fiscal stimulus are powerful enough to help the S&P 500 look through the energy nightmare. We also get an exclusive look at Caliban. Finally, Warren shares his tactical portfolio positioning, explaining his strategy for staying overweight in both stocks and oil commodities while remaining underweight in fixed income. Tune in to see how the S&P 500 reached the 7,000 target predicted in 2024 and why Warren believes the path to 8,000 remains intact. Recorded May 1st, 2026.

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Timestamps

00:00 Intro

00:10 Caliban Alert

01:40 "Two Wolves" of the Market

07:00 Earnings Expectations Are "Skyrocketing"

17:50 The Scramble For Compute is Real

21:50 The Big Squeeze in GPU Availability

27:40 "I'm Scared Out Of My Mind... And I'm Also Very Bullish"

32:01 Hyperscaler CapEx (charted on Caliban)

41:35 Caliban Free Trial (and Discount for Monetary Matters Listeners)

44:55 Oil Shock: "Catastrophic Potential" From Strait of Hormuz Closure

51:00 "Sense of Complacency" in Oil Markets

53:48 Asset Allocation Outlook: Overweight Commodities, Overweight Equities, Underweight Fixed Income

1:00:20 "Pain Point" for U.S. Consumer from Gas Prices

1:07:21 Closing Thoughts

1:12:12 Caliban (End)

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