Did the Blue Sweep Just Tank the AI Trade?
Technology is being repriced sharply, and the blue sweep has added a potential obstacle to AI infrastructure growth. Further downside is a risk, not a certainty.
In this update, Garry Davis examines the market damage, the financing and permitting risks facing data centres, and why the best long-term AI businesses may ultimately have a very different outlook.
Semiconductors suffered a severe week, and falling bond yields did not rescue technology stocks. The Nasdaq and S&P 500 charts now make a more significant index correction a higher-probability scenario in Garry's assessment. Neither the depth nor duration can be known in advance, and this is not a call to abandon all technology exposure.
The election result raises questions about future data centre permitting, particularly in states where incoming leaders favour tighter controls. That potential slowing of approvals is not the same as an immediate halt to AI investment.
Garry distinguishes well-funded businesses from companies dependent on increasingly expensive debt, then examines the relative strength of utilities, healthcare and selected gold stocks. The priority is to follow observable money flows, manage weightings and avoid guessing the bottom.
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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.
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