Jul. 27 at 9:28 PM
A lot of people are asking if the AI trade is over.
My view: this is still an evolving situation. There is no “victory” or “defeat” yet — the market will need more data over the coming months.
History matters.
The
$CSCO collapse after the dot-com peak did not happen overnight. It took almost a year to move from
$82 to
$12-
$13, with plenty of violent rallies along the way.
That’s the key point:
A bearish trend does not mean stocks move straight down.
Oversold conditions can create sharp countertrend rallies, and both bulls and bears can get trapped.
The bigger risk is positioning.
If hyperscalers slow AI capex, some names could bounce while AI ETFs like
$SMH and
$QQQ move differently. Correlations can break temporarily.
But if the broader AI spending cycle weakens, the market may eventually reconnect.
My view: respect rallies, but the primary trend remains something investors need to prove has changed.
Watching liquidity, capex trends, and AI demand closely.
