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The AI trade goes deep in the red… Wednesday’s presser with no map… Thursday’s number Warsh actually watches… and the calendar that decides everything in September
As I write on Tuesday morning, the AI trade is deep in the red, with some semiconductor stocks down double digits.
While it’s tempting to point to a single headline, a variety of dynamics are colliding at once.
South Korea’s tech-heavy KOSPI Composite Index crashed about 11% last night on bubble fears… this is normal mean-reversion after the near-vertical runup that the AI trade enjoyed in the spring… weeks of pressure are culminating in today’s panic selling, and given that AI stocks are the market’s biggest winners over the past year, they’re number-one on the “sell” list… investors continue to question whether the hyperscalers will eventually cut back on their AI spend, starving the AI infrastructure players of projected earnings… and more acutely today, concerns about China have intensified.
