And there we go, the markets already giving back yesterday’s gains.
This market is so strange.
Literally nothing makes sense anymore.
Do I think the AI trade is early? Yes.
Do I think this volatility will continue for a while? Yes.
I’m playing this a little different than the average trader/investor.
I believe cash will be powerful the next few years as AI dramatically changes how we operate as a civilization.
There will be tons of short term turbulence, for which I want cash handy.
That is just my personal take, not financial advice.
Data from Goldman Sachs’ Prime Brokerage (PB) unit indicates that hedge funds have undergone a significant de-risking process, with AI and technology stocks serving as the primary targets for position reductions.
The sharp sell-off in tech stocks on November 5 further amplified market concerns regarding AI-related capital expenditures and high valuations.
However, institutional divestment does not necessarily imply that demand for AI has vanished.
Consequently, the upcoming earnings reports from CoreWeave (on November 10) and Nebius (on November 12) serve as critical benchmarks for assessing demand for AI computing power, data center development, and commercial viability.
Should both companies report robust revenue, strong contract backlogs, and positive forward-looking guidance—while maintaining manageable cash flow and financing pressures—the fundamentals of the AI industry may well remain resilient.
Conversely, if revenue growth fails to cover capital expenditures, or if future orders and customer demand begin to soften, market anxieties regarding the return on investment for AI infrastructure could intensify further.#crwv #SOXL