Analysts Predict AI Stock Pullback, Suggest Long-Short Trade Strategy
BCA Research analysts have flagged a potential sell-off in U.S. hyperscalers like Microsoft, Alphabet, Amazon, Meta, and Oracle, citing concerns over poor returns from their massive AI investments. The firm recommends shorting these tech giants while going long on Asian chipmakers from Korea and Taiwan.
The hyperscalers' combined $400+ billion infrastructure spending spree mirrors historical patterns where capital booms lead to subpar investor returns. Their outsized market weight means any downturn could Ripple across broad indices, impacting passive and active portfolios alike.
This warning comes as cyclical patterns previously seen in cryptocurrencies and commodities appear to be repeating in AI equities. "Deploying vast sums quickly often leads to poor capital allocation," the analysts noted, drawing parallels to past tech investment cycles.
