AI Investment Takes Center Stage & Silver Shows Up in New Places
A fundamental shift could be underway in what's driving U.S. economic growth amid economic crosscurrents, and silver is finding unexpected relevance beyond traditional investing narratives.
Industry News | Macro Moves
Reporting Cadence by Consensus?
SEC Chair Paul Atkins says investors and banks should shape any shift from quarterly reporting, signaling openness to flexible disclosure “cadence.” No timeline; proposal first, then consideration. Reuters SubscribersUngated
Remedy Phase: DOJ vs. Google Ads
A high-stakes “remedy” trial is underway as the DOJ seeks to break up Google’s digital ad tech business, following a court ruling labeling it an illegal monopoly. A forced divestiture could disrupt digital ad markets vital to asset managers’ outreach. AP News
The WSJ reports major companies like Microsoft and NBCUniversal are demanding office returns, but average attendance "barely budged" as employees resist mandates and managers struggle with enforcement amid economic uncertainties. Wall Street Journal
In Focus
America's Growth Engine Just Changed—And It's Not What You'd Expect
Throughout the modern era, the U.S. economy has leaned on consumers, with household spending accounting for roughly two-thirds of gross domestic product (GDP). From peanut butter to plane tickets, household purchases have powered U.S. economic growth. But now that formula may be shifting.
In the first half of 2025, capital spending on AI (software and information processing equipment) contributed more to GDP growth than personal consumption. AI-related investment contributed 1.1% to growth compared to 0.7% from consumer spending.
It’s historic: Today’s AI spending rivals some of the biggest investment waves in U.S. history, including the 2.5% of GDP from railroad building between 1828 and 1860 and the 1.2% from telecom infrastructure in 2000.
Hyperscalers are dominant: Just four companies—Meta, Alphabet, Microsoft, and Amazon—are planning to spend about $361 billion on AI infrastructure in 2025, up more than 60% from last year.
Hyperfueling the AI Boom
Source: Council on Foreign Relations, 10-Ks (most recently filed from January through July, 2025), and company news.
Spending is concentrated at the top: Among consumers, the top 10% of earners are doing the spending. They can better handle higher prices and benefit from strong markets. The middle class is mostly just keeping up with inflation.
The Wider Picture
The Atlanta Fed’s GDPNow model predicts GDP growth of 3.3% (annualized) for the third quarter, and forecasts for 2025 have nudged higher to 1.6-2.0%, better than expected, though a touch behind long-term trends.
But inflation and unemployment are increasing. Core PCE inflation rose 2.9% in July, up from June’s 2.8% (headline PCE inflation held at 2.6%), while unemployment edged up to 4.3% in August. Coupled with slower growth, the mix points to low-grade stagflation, a backdrop we haven’t seen in decades that could complicate Fed policy direction in 2026.
Meanwhile, equity markets are reaching all-time highs, powered by tech optimism among other factors—even as economic indicators present a slightly more ambiguous backdrop.
But Wait, Are We Undercounting the AI Economy?
A few economists at Goldman think so. As they see it, spending on AI infrastructure, such as semiconductors and servers, often isn’t counted right away in GDP, since it only registers when it’s part of a finished product, such as a laptop.
That accounting lag may be hiding real growth. Official figures show about $45 billion in AI-related activity since 2022, but revised estimates suggest the total is closer to $160 billion, translating to an extra 0.3% of annualized growth that isn’t appearing in the headline data.
What to Watch
Capex trends from major tech firms: It appears that spending by hyperscalers is driving more growth than consumers right now. If those budgets slow, so might the broader economy.
Middle-tier consumption trends: With growth driven by top earners, watch how middle-income households handle persistent inflation and rising job insecurity. Early signs of strain could be surfacing.
Policy reaction to a murky picture: With inflation and unemployment both creeping up, the Fed faces tradeoffs that could cloud longer-term policy direction.
Takeaway
Even in a softening macro environment, AI is pulling more weight in the economy than meets the eye. For now, it’s fueling growth from the top, but how long that can offset broader pressures is the question. In a cycle that’s anything but typical, the ultimate test may be whether these massive investments translate into actual productivity gains, or just become the most expensive bet in economic history.
From the Team
“The Fed cut rates and signaled two more in 2025, with 2026 hinging on future data. The low hiring, low firing labor market continues, while retail sales and industrial production exceeded expectations.”
一 Alexander D. Oxenham, CFA®, Partner & CIO
“Low volatility and clearer Fed policy have boosted risk assets. The themes driving gains include large-cap growth momentum, small-cap strength, and U.S. banks riding a steeper yield curve.”
一 Timothy Reilly, President
“Capital markets are opening up—IPOs remain light but more active than the past two years, and M&A activity is starting to pick up—a good sign.”
一 Craig O’Neill, Chief Executive Officer
Drill Down
AI Meets Au & Ag: Is the Future Running on Precious Metals?
They aren’t just crisis hedges anymore. As AI infrastructure scales, gold (Au) and silver (Ag) are showing up in semiconductors, sensors, and next-gen computing. Investors may want to look beyond the usual narratives and view them as potential strategic inputs一not just insurance.
Headline/Core Personal Consumption Expenditures (PCE) Price Index
9/26/25
Job Openings and Labor Turnover Survey (JOLTS)
9/30/25
Jobs Report (Nonfarm Payroll, Labor Participation Rate & Unemployment Rate)
10/3/25
New Residential Construction (Housing Starts, Building Permits, Completions)
10/17/25
From the desk of the CEO
We're pleased to announce that Seth Waugh has joined Rafferty Holdings, Hilton's parent company, as Chairman.
"The former PGA CEO and Deutsche Bank Americas CEO brings proven, global leadership experience to Rafferty, which we believe will help accelerate growth and strengthen strategic initiatives across all portfolio companies.”
- Craig O’Neill, Chief Executive Officer
Bottom Line
We think corporate investment has become a pivotal driver of growth, alongside factors such as a dovish Fed, easier financial conditions, strong momentum, and broader market participation. Still, volatility could return amid rich valuations, persistent inflation, labor softening, and fiscal pressures.
Hilton Capital Management
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