The AI trade just got a reality check. Wells Fargo is telling investors that Friday’s brutal tech selloff should serve as a warning about the dangers of piling too heavily into artificial intelligence stocks.
The semiconductor sector alone shed roughly $1.4 trillion in market value during the session, dragging the Nasdaq 100 and S&P 500 down with it.
The sugar rush is over
Wells Fargo chief equity strategist Ohsung Kwon described the recent surge in AI stocks as a “sugar rush” and declared it effectively finished.
Kwon characterized the decline as positioning-driven rather than rooted in any fundamental shift in the AI story itself. His base case is a slower equity rally going forward, not a bear market.
