AI demand widens Nasdaq and S&P spread
The guest argued that intense call buying in mega-cap AI names is driving a historic performance and volatility dispersion between the Nasdaq and the S&P 500.
The argument
The Nasdaq's outperformance is being fueled by speculative bidding in semiconductor and tech ETFs, alongside anticipation of major private tech valuations. This has led to a staggering widening of the implied volatility spread between the two indices.
The thesis, stress-tested
✓ What validates it
- ✓Continued widening of the implied volatility spread between QQQ and SPY
- ✓Outperformance of tech-heavy indices relative to the broader market
▸ Risks discussed
- ▸A sudden reversal or exhaustion of the AI call-buying trend
- ▸Overvaluation risks in mega-cap tech names
Hear it yourself
"is in the SMH. Really, it's not not obvious that it's really there. So, a lot of stuff obviously churning here. And so, again, some stock had to get sold. We're gonna talk about this in a minute, but now the market writ large seems to be finding some some, some footing. A little SpaceX trivia here for you, Jack. This is the biggest ever raise. So the IPO is gonna raise $75,000,000,000, so it's 550,000,000 shares at 135. The biggest previous was Saudi Aramco. That was $30,000,000,000. I don't know what happens if you adjust that, for inflation on a on a real terms, but, you know, this is huge."
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