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Private credit has billions tied up in software companies that are about to be exponentially wiped out. AMD cratered 17% today, Oracle bled 6%, Broadcom dropped 6%. This isn't a tech selloff. This is a credit crisis disguised as quarterly earnings disappointment. |
And most people are completely missing what's actually happening. |
What Exponential Actually Means |
Here's the thing about exponential that nobody understands - including these software companies burning through private credit funding. |
Picture an NFL game. At kickoff, somebody drops one drop of water from an eye dropper at the 50-yard line. Minute two, they drop two drops. Minute three, four drops. Keep doubling every minute. |
By the end of the first quarter, you've got a puddle across the entire field. By halftime, you're two feet underwater across the stadium. By the third quarter, the stadium is nearly submerged. By the fourth quarter, you've created the Mariana Trench with goalposts at the bottom. |
That's exponential. And every six months, AI gets four times more powerful than it was a year ago. |
Most software companies are still planning for puddles while the stadium is already flooding. |
The Private Credit Time Bomb |
Thomson Reuters got crushed yesterday because OpenAI launched one legal AI tool. One announcement. One product. Immediate stock carnage. That's not a tech cycle. That's a credit crisis preview. |
Now scale that across every software-as-a-service business that private credit is backing. Companies burning cash trying to "grow aggressively" while AI makes their core products obsolete in months, not years. |
AMD's CEO Lisa Su told CNBC today that "AI is accelerating at a pace I would not have imagined." She's describing her own industry's obsolescence in real time - and the credit exposure behind it. |
How do you refinance debt when your business model disappears that fast? |
The Rotation Is Already Happening |
While everyone fixates on which tech stock survives, the smart money already moved. Look at today's action: Dow up 64 points, Nasdaq crashed 2.3%. Amgen surged 7%, Honeywell jumped 2%. |
Why? Because AI can replace PowerPoint creators. It can't replace wheat farmers. It can't mine uranium. It can't build physical infrastructure or generate actual electricity. |
The market is rotating into real assets - materials, energy, agricultural inputs, utilities. Things that matter. Things AI enhances but can't eliminate. |
Companies like ADM in agricultural inputs. Korea Electric Power, a regulated utility with massive AI infrastructure demand trading at cheap valuations. Cal-Maine Foods - an egg company with no debt, tons of cash, benefiting from increased protein demand. |
These aren't sexy momentum plays. But they won't gap down 17% because some AI startup launched a better tool overnight. |
The 30-Year Cycle Just Broke |
We've been running the same equity market playbook for three decades. Same stories, same reactions, same Groundhog Day cycles. |
But exponential change breaks 30-year patterns. When coinage enabled ancient trade, empires that refused to adopt it didn't gradually decline - they vanished. |
AI isn't just another technology upgrade. It's the coinage moment for software companies. And private credit is massively exposed to businesses that are refusing to see the flood until it's already at stadium roof level. |
Today's bloodbath? That's not capitulation. That's the first wave of exponential disruption hitting credit markets that aren't prepared for the speed of change. |
Most software companies are still debugging their quarterly guidance while the exponential tsunami is already overhead. |
Stay Positive, |
Garrett Baldwin |
P.S. I'm tracking these exponential shifts and credit exposures live in the TheoTrade chatroom, which runs 9:30 to 4:00 M-F. |
Click the link, name your price for your first month, and get real-time insights as this rotation accelerates into real assets. Don't just read about exponential change - position for it with us. |
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