economy
Here’s how we played the massive rebound in AI stocks this week
AI stocks roared back to help lift two of the major averages to fresh records.
TL;DR
- Major averages, including the Dow and S&P 500, closed at record highs, with the Nasdaq also gaining significantly.
- A weak July jobs report reduced expectations for a September Federal Reserve rate hike, sending Treasury yields lower.
- AI-related stocks, particularly semiconductor and data center companies, rebounded strongly after a previous period of pressure.
- The collapse of a leveraged hedge fund, 'Situational Awareness,' led to indiscriminate selling, which is now viewed as a 'clearing event' for the AI trade.
- SpaceX announced it will build its AI infrastructure using Nvidia's hardware, driving Nvidia's stock up over 11%.
- Despite solid results, AMD shares slipped, though the article suggests demand is robust enough for multiple AI infrastructure players like Nvidia, AMD, and Intel.
- Portfolio adjustments included buying more Corning and Intel, adding to Johnson & Johnson, and exiting Honeywell Aerospace and trimming positions in CrowdStrike and Palo Alto Networks.