AI trade entering its late innings
The bear case argued for the AI trade is that it is in its eighth or ninth inning, signaled by speculative blow-off tops in secondary names and technical exhaustion in market leaders.
The argument
The speaker pointed to Oracle's massive blow-off top and subsequent pullback as a local top that is unlikely to be surpassed in 2026. He also highlighted the double top in semiconductors and Nvidia's head-and-shoulders pattern as signs of structural exhaustion, despite short-term bullish consolidation.
The thesis, stress-tested
✓ What validates it
- ✓Oracle failing to reclaim its previous highs near $350
- ✓Nvidia failing to sustain breakouts and experiencing high-volume gap-downs
▸ Risks discussed
- ▸Investment banks raising price targets and underestimating chip demand
- ▸Nvidia negating its head-and-shoulders pattern and continuing to march higher into the new year
Hear it yourself
"So we're in the eighth, ninth inning of the AI trade in the first, second of the gold miners trade. That's kinda how I'm looking at it. The Oracle thing gives you confidence, you know, that and the double top and semis and and Nvidia pulling back and forming a big head and shoulders."
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