It was tough sledding on Friday as only energy finished in the plus column.

And all factors finished in the red.

The AI trade has been hyped and compared to the dot-com-era boom since ChatGPT was unveiled.  Consumer adoption has happened at warp speed, and enterprise adoption is now ramping up even faster.

There are several storylines unfolding simultaneously – the biggest is perhaps all the money that so-called hyperscalers are investing to dominate AI in the future.

These are the most successful businesses in history, and they are using all their free cash flow and resorting to debt and additional stock offerings to win this race.

Some equate this to Captain Ahab’s obsession with Moby Dick.

Others point to companies like IBM that once ruled the technology world, then took their eye off the ball, and today struggle to find a new direction and relevance.

The Street has speculated on whether hyperscalers are spending too much or too little to own the AI future.

These days, conventional wisdom holds that if any of them stop spending at the breakneck speed we anticipate, the trade is over.

I do not see that happening.  This week we hear from Google and will know more.

The biggest beneficiaries of hyperscaler spending/investment have been semiconductors in general and memory in particular.

On Friday, semiconductors entered into a bear market (down 20% from the all-time high). But they are significantly above levels a year ago, especially the tariff tantrum dip.

Consolidation

Retail investors have made a fortune in chips and believe in the story.               

Meanwhile, hedge funds have been selling and shorting all year long.

I think this is consolidation. It's not fun, but it creates opportunities. This is your window.

Comments

What if we moved ALL options trading out of the stock market and 100% into the prediction (gambling) markets instead? No more options, only betting on stock price in prediction markets. Michael Moore on 7/20/2026 10:12:32 AM

Tweet

 

Home | Products & Services | Education | In The Media | Help | About Us | Disclaimer | Privacy Policy | Terms of Use | All Rights Reserved.