During an interview with CNBC, Eisman downplayed the impact of the Iran conflict, stating that it could be “very, very positive” in the long term for equity markets.
- Eisman expects the U.S. to eventually win, but added that the Iranian regime’s capacity to take a lot more pain because its views about martyrdom could drag on the conflict.
- He added that the fear among some investors that people will stop buying Nvidia chips is “wrong.”
- Eisman added that the issue is not whether AI works; the issue is whether firms will be able to make enough money to justify the investment in setting up the infrastructure.
“The Big Short” investor Steve Eisman on Monday reportedly stated that he would not change even a single trade despite the ongoing U.S.-Israel-Iran war.
During an interview with CNBC, Eisman downplayed the impact of the Iran conflict, stating that it could be “very, very positive” for equity markets in the long term.
“People react because of what’s happening; oil prices are obviously up. But if it goes well, two months from now, prices will be back to where they were,” he added.
Eisman Cautions War Could Take Some Time To Be Over
While he maintained optimism about equities over the long term, Eisman cautioned that it could take some time for the war to be over. He expects the U.S. to win, but added that the Iranian regime’s capacity to take a lot more pain because its views about martyrdom could drag on the conflict.
Analysts at UBS noted that they don’t expect the disruption to oil supplies to be sustained, based on the relative military success of the US-Israeli operation so far and the likely rapid degradation of Iranian military capacity.
“We also believe the Trump administration will be mindful of the domestic political risk of a sustained increase in oil prices heading into the U.S. midterm elections in November,” the firm stated in a note on Monday.
Eisman Downplays Fears That People Will Stop Buying Nvidia Chips
“The Big Short” investor added that the fear among some investors that people will stop buying Nvidia Corp.’s (NVDA) chips is “wrong.”
“It is very, very clear given the fact that just four hyperscalers are going to spend $650 billion on AI infrastructure, versus $450 billion that was spent by everybody last year, that Nvidia’s numbers will be fine for another year,” he noted.
Eisman added that the issue is not whether AI works; the issue is whether firms will be able to make enough money to justify the investment in setting up the infrastructure. “We won’t know probably for a year, that whether all this money being spent is justifiable or not,” he said, adding that this is why the markets get whipsawed all the time.
Meanwhile, U.S. equities declined in Monday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.42%; the Invesco QQQ Trust ETF (QQQ) fell 0.43%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.46%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.
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