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After a 35% correction earlier this year, the sector has rebounded 44%—driven by soaring chip demand, AI infrastructure deals, and record-high forward earnings. Nvidia and AMD are leading the charge, while buybacks across the board signal renewed confidence. The semi cycle is heating up fast.
Markets have ripped from extreme fear to overbought frenzy, with RSI readings now flashing red-hot across SPX, NDX, and SOX. Short covering is driving the squeeze, but with gross leverage at all-time highs and long-onlys still on the sidelines, positioning risk is building fast.
The AI trade is not dead. If anything, it’s regaining momentum—reminding markets that tokens, not tariffs, may be the real catalyst for the next leg higher. That was the message from hedge fund legend Philippe Laffont (founder Coatue $54 billion AUM) on the latest All-In episode. Time for the next new leg higher in this old general?
Despite a strong market rebound, institutional positioning tells a different story—hedge funds are still net sellers, leverage remains near record lows, and sentiment is stuck in the gutter. With so much skepticism… what happens if the rally actually has legs?