AI Is In A State Of Panic: Start Buying It

AI beneficiaries, especially semiconductor stocks, have sharply corrected, creating rare buy-the-dip opportunities as panic and leverage unwinding shake out euphoria. Despite fears over enterprise AI budgets and global margin calls, AI revenue growth now exceeds capex costs, signaling improved economics and sustainability. I expect a Goldilocks Q2 earnings season for hyperscalers, with stable capex guidance and potential margin, growth, and ROIC gains supporting renewed bullishness. While volatility may persist, current valuations for AI stocks and semiconductor-heavy indices look attractive relative to robust forward EPS growth.

AI stocks are getting a harsh reality check in June, with most AI beneficiaries now in deep correction territory. Almost every day there is a new headwind that imposes on the AI trade.