The AI trade has stalled since midyear. It makes sense. The Philadelphia Semiconductor Index surged 88% in Q2, its biggest quarterly gain on record, beating even the 67.75% rally in Q1 2000 during the dot-com boom.
Such a massive surge could only be followed by a correction, especially in the messy macroeconomic environment we live in, where supply-side inflation, rising AI capex, high oil prices, and the biggest technological revolution in history are all converging to create particularly strange times, especially for investors.
In this short article, I’ll explain what AI needs to maintain its momentum and what investors should be looking at.