Evidence is mounting that investors are beginning to rotate away from AI providers and toward AI adopters as concerns grow around compute costs, margin compression, and the sustainability of current valuations. The recent semiconductor selloff, dubbed the “chip-wreck” across Wall Street, has reinforced this theme, even as the broader AI trade remains supported by powerful secular demand trends.
At the same time, historic equity outperformance versus bonds is setting the stage for meaningful rebalancing flows, raising the probability of increased volatility and a deeper correction in risk assets over the coming weeks.
Despite near-term turbulence, the longer-term backdrop remains constructive. The ongoing transition to a multipolar world continues to generate durable demand for artificial intelligence, critical minerals, and defense-related investment, supporting global equity markets even as geopolitical tensions persist.
Against this backdrop, 42 Macro continues to favor using AI and Mag-7 exposure as a Source of Funds to capitalize on undervalued opportunities across global markets.
If you are not confident your portfolio is positioned correctly for the evolving macro landscape, partner with 42 Macro for data-driven insights and proven risk management overlays—KISS and Dr. Mo—to help you stay on the right side of market risk.
— Team 42
