IS AI FOR REAL? | Crouch Connection | October 2025

IS AI FOR REAL?

 It’s the question on everyone’s mind — from Wall Street to Main Street. The short answer is yes — but it’s also complicated. Like every great innovation wave before it — electricity, automobiles, the internet — artificial intelligence is transforming how we live and work, just not in a straight line.

The early excitement has brought both legitimate breakthroughs and predictable exaggeration. Yet beneath the noise, something profound is taking root: a new layer of productivity, efficiency, and insight that will likely reshape the global economy over the next decade.

Market and Economic Overview

• Corporate America is spending big on AI. Companies are investing hundreds of billions in data centers, chips, and cloud infrastructure to power new applications. That’s not speculative — it’s showing up in capital spending and earnings reports.

• Productivity may be turning the corner. Early adopters are already seeing measurable gains in output per worker, especially in software, logistics, and healthcare.

• Interest rates are easing. The 10-year Treasury has slipped below 4%, mortgage rates hover near 6.3%, and the Fed is expected to trim short-term rates again soon — all of which should help consumers and business investment alike.

  
  

• Inflation appears contained. Economists now talk more about “reacceleration risk” than “recession risk.”

So, while headlines swing between “AI mania” and “AI meltdown,” the underlying economy looks surprisingly balanced — and increasingly efficient.

Policy and Global Backdrop

Washington’s recently enacted “One Big Beautiful Bill” — combining tax cuts, infrastructure incentives, and manufacturing credits — is likely to amplify capital spending. Much of that spending will intersect with AI, from smart grids and autonomous vehicles to energy management and supply chain automation.

Meanwhile, global trade tensions appear to be easing, even as negotiations with China remain complex. The U.S. continues to represent just 4% of the world’s population yet produces roughly 25% of its GDP (a powerful reminder that it would be economic folly for other nations not to trade with us) and remains the global hub for technological innovation.

Portfolio Perspective

For investors, AI represents both opportunity and discipline:

• Focus on fundamentals. Many “AI-labeled” stocks are overextended, but the long-term productivity story is real. We continue to favor diversified exposure — balancing leading innovators with high-quality companies poised to benefit from AI-driven efficiency.

  
  

• Rebalance as needed. Gains in technology sectors may have tilted allocations. Adjusting back to target weights helps manage risk.

• Use volatility to your advantage. Periodic pullbacks in growth names can offer attractive entry points for patient investors.

  
  

• Review year-end strategies. Tax-loss harvesting, charitable giving, and RMD planning all matter as 2025 winds down.

 Final Thoughts

If you haven’t yet read Stephen Auth’s recent piece, Nothing Moves in a Straight Line, https://www.federatedhermes.com/us/insights/article/nothing-moves-in-a-straight-line.do, I highly recommend it. His insights into market psychology, cycles, and the discipline of long-term investing perfectly capture where we are today — a moment of mixed signals, quiet optimism, and opportunity wrapped in uncertainty. 

AI is not a fad — it’s a force. But, like every major shift, progress will be uneven, and patience will be rewarded. The winners in this new era will be those who adapt thoughtfully rather than react impulsively.

As Stephen Auth reminds us, “Nothing moves in a straight line.” That’s as true for markets as it is for technology. The important thing is to stay invested in the future — not just the headlines.

If you’d like to discuss how these developments may shape your portfolio or financial plan, please reach out. We welcome the conversation.

Best Regards,

Dave Crouch

CEO & Chief Investment Officer

Aspen Grove Asset Management

Buffett Quote:

“For 240 years, it’s been a terrible mistake to be against America, and now is no time to start.”

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor."

AGP Franklin, LLC ("AGP Franklin") is a registered investment advisor. Advisory services are only offered to clients or prospective clients where AGP Franklin and its representatives are properly licensed or exempt from licensure.

Aspen Grove Asset Management

3326 Aspen Grove Drive | Suite 602 | Franklin, TN 37067 | 615.778.9842

AspenGroveAssetManagement.com | Dave.Crouch@AspenGroveAssetManagement.com