AI Trade Phase 2 Begins: Q3 Earnings to Split Winners From Losers

The AI trade has entered a new phase.

Micron has helped prove that AI infrastructure demand is real, but the market is now asking a harder question: which companies can turn that demand into genuine economic returns?

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In this week's update, Garry Davis looks at why Q3 earnings are now pivotal for the AI trade, what Micron revealed about the infrastructure build-out, and why the next phase may split genuine winners from companies simply riding the theme.

The key message is that the easy phase of the AI trade is likely over. Demand has been proven, but demand alone is no longer enough. The market now wants evidence of pricing power, margins, cash conversion, backlog quality and credible payback on the enormous capex being deployed across the sector.

What you'll learn:

• Why Micron was such an important earnings signal for the AI infrastructure build-out
• Why the market is moving from AI demand to AI economic proof
• What hyperscaler earnings need to show about capex, pricing and customer demand
• Why the next phase may split the genuine AI winners from the passengers
• How to think about volatility, risk management and stock selection before the July earnings window

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Any advice in this video is general advice only. Neither your personal objectives, financial situation or needs have been taken into consideration. Accordingly, you should consider how appropriate the advice, if any, is to those objectives, financial situation and needs, before acting on the advice. Garry Davis (AR No:317590) is an authorised representative of Primary Securities Ltd (AFSL No. 224107).

Note to traders* The publishers of this material wish to disclose that they may hold stocks mentioned in their portfolios and that any decision to purchase those stocks should be made only after the purchaser has made their own enquiries as to the validity of any information in this material.

Past performance should not be taken as an indicator of future returns.

It must also be noted that trading in the stock market involves risk of losing money. Investors and traders can take numerous steps to mitigate such risks with a clear plan, clear targets and entry prices, and strong support from an experienced trader.

This approach underpins everything we do and is where we advise every member to start, and you have access to Garry to support you in creating a trading plan that suits your risk profile, timeframe and capital allocation.