The AI Trade is getting crushed...AXTI(-67%), AAOI(-56%), NBIS(-41%), SNDK(-38%) etc.

[DegenerateGambler]

The AI Trade got obliterated the last month, with leading names down a ton.  I wouldn't really call this a buying opportunity but it seems like the crash of the internet bubble in 2000 in the early stages.  A lot of these names still trade at >20 times sales and still has ways to go down.  

The question is is this just a pullback or is the AI trade effectively "over"?

[Gregmal]

When you look at what was driving the rally, who was driving it, and then the why and how, it all kinda lines up with a top. Qualitatively and gut feel wise too, I think Ive got it right. Q2 very much felt like Q1 2021 when the Covid beneficiaries and hyped SPAC stuff just began crumbling after it exhausted the last of time dumb money. And just the same as then, the “you can’t short this market” refrains were consensus whenever any sort of bearish sentiment arose.

[brobro777]

I don't know about other names but just looking at da action, Micron seems to be headed straight to $600, no bounce

 

I got no position in MU so whatever man but that's what it feels like for the memory names - straight down, no bounce

[Sinbius]

1 hour ago, DegenerateGambler said:

The AI Trade got obliterated the last month, with leading names down a ton.  I wouldn't really call this a buying opportunity but it seems like the crash of the internet bubble in 2000 in the early stages.  A lot of these names still trade at >20 times sales and still has ways to go down.  

The question is is this just a pullback or is the AI trade effectively "over"?

Well...at least you are coherent with your nickname...

[DegenerateGambler]

1 hour ago, Gregmal said:

When you look at what was driving the rally, who was driving it, and then the why and how, it all kinda lines up with a top. Qualitatively and gut feel wise too, I think Ive got it right. Q2 very much felt like Q1 2021 when the Covid beneficiaries and hyped SPAC stuff just began crumbling after it exhausted the last of time dumb money. And just the same as then, the “you can’t short this market” refrains were consensus whenever any sort of bearish sentiment arose.

yeah i don't see the Mag7 hyperscalers to keep increasing capex 30% per year for the next 5 years, they would need to start seeing return on their capital.  So the market is forward looking and started to sell these AI names that were trading at hundreds of times sales knowing capex won't go up forever.

[DegenerateGambler]

1 hour ago, brobro777 said:

I don't know about other names but just looking at da action, Micron seems to be headed straight to $600, no bounce

 

I got no position in MU so whatever man but that's what it feels like for the memory names - straight down, no bounce

memory is still probably cyclical so a low PE might signal the cycle top.  I would agree MU could tank a lot more here.