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This week's market charts show prediction markets nailed the Brazilian election, the Rule of 40 metric is losing relevance as investors prioritize growth over profitability, and earnings revisions are narrowing—with only energy and hardware seeing sustained analyst optimism while the rest of the market faces downgrades.
- Prediction markets showed no partisan bias across 100+ years of election data; they also beat the market by ~3 weeks on Bolsonaro's Brazilian election win, while the MSCI Brazil ETF lagged behind.
- The Rule of 40 (growth + profit margins) has climbed from 17% to 23% over three years, but its correlation with stock multiples has turned negative—because rising margins mask slowing growth, and investors care far more about growth than the composite score.
- AI infrastructure spending remains on an exponential curve with 60% of industrial companies reporting higher order backlogs, but broader tech spending has plateaued at 30% growth; analysts expect benefits to concentrate in hardware and semiconductors while downgrading forecasts for the rest of the ecosystem.