The AI trade may be at a turning point. Where it may go, and how to play it

Todd Gordon says he trimmed 13.5% from the AI-related portion of his growth portfolio, added to energy and healthcare, and placed a 5% Nasdaq hedge via PSQ amid a rotation from technology toward value. Semiconductor ratios versus the S&P 500 and Nasdaq-100 have lagged since peaking around June 1 and are at support; the Nasdaq-100 is retesting broken support near 30,000, which Gordon believes may hold as resistance. He says he would lift the hedge and redeploy the trimmed allocation if that view proves wrong.

Analysis

The key signal is not whether the Nasdaq rebounds, but whether semiconductor relative strength turns up. SMH lagging SPY and QQQ despite the AI-buildout narrative suggests expectations may already be demanding: if the ratios lose support, passive and momentum flows could reinforce the rotation, pressuring semiconductor multiples before any deterioration in reported demand. Conversely, a durable recovery in those ratios would weaken the value-rotation thesis more than a headline-driven index bounce would.

The SpaceX-related catalyst may lift sentiment without broadening earnings participation. If index gains remain concentrated while semis and market breadth fail to confirm, the rally is vulnerable to reversal; watch breadth and SMH/SPY and SMH/QQQ alongside the stated 30,000 Nasdaq-100 retest. The immediate horizon is a technical resistance test; over 1–3 months, earnings and guidance from large semiconductor and platform companies should determine whether AI spending supports relative performance. Over 6–18 months, sustained customer capex matters more than a single sentiment catalyst.

Contrarian risk: the bearish setup is widely legible and could unwind quickly if the Nasdaq reclaims resistance and semiconductor ratios stabilize. A break below ratio support would strengthen, but not by itself prove, a broader risk-off signal.

Key Decisions for Investors

• Treat PSQ as a tactical hedge, not a structural short: retain only while the Nasdaq-100 fails near 30,000 and semiconductor ratios remain weak; reduce or exit if the index reclaims that area and SMH/SPY and SMH/QQQ turn higher.
• Avoid adding to a broad semiconductor short before the ratio-support break is confirmed. A close below support in both SMH ratios would be a clearer trigger; invalidate the trade on a sustained relative-strength recovery.
• For a relative-value expression, favor energy or healthcare over semiconductors only while the rotation is confirmed by relative performance. Do not infer durable sector leadership from the article’s portfolio changes alone.
• Monitor breadth and upcoming semiconductor/platform earnings and capex guidance over the next 1–3 months. Narrow index gains without improving breadth or semiconductor relative strength would support keeping risk hedges; broad participation and stronger guidance would argue for redeployment.