I feel like it’s very difficult to get a read on the AI trade… (chips, smh, intc, bubble)

I’ve had massive returns on SMH and INTC over the last x amount of months.

I’m currently watching a documentary on the dot com bubble.

I see a lot of similarities but also a lot of pretty poignant differences.

Marvell and Dell are going to post their earnings this coming week - relevant because i’ve been trying to closely monitor the AI trade and these 2 seem to be the last reporting companies for last quarter’s earnings in regards to the AI trade.

As of the last hyper-scalers earnings reports all of which seemed to show that AI CAPEX was proving to be profitable as most if not all posted large beats and massive revenue, much of which coming from cloud (Amazon, Microsoft, Google) and advertising (Meta).

Most of them even INCREASED this CAPEX forecast - so the ‘picks and shovels’ ($SMH) should still be posting record revenues.

Nvidia just posted their earnings, again, MASSIVE beat, margin and revenue growth.

TSMC and AMD CEO as well as many analysts are very bullish on CPU demand, semiconductor demand often hearing things like CPU demand doubling YOY or crazy shit like that.

You also hear semiconductor demand becoming a multi-trillion dollar industry (I’m paraphrasing, but basically just very parabolic hyperbole that may not be hyperbole at all).

You have Elon Musk shooting for the stars (literally.) and also talking about collaborating with Intel on this Terafab project which is going to be like a chip-making foundry on steroids.

You have physical AI, robotics, autonomous vehicles and semi trucks, LLM’s, visual recognition software and the entire umbrella of what AI could possibly achieve/not achieve.

You have consumer sentiment at an all time low, people seem to generally hate AI which is fine but I find that people seem to automatically hate AI because it is a direct threat to human creativity or their livelihoods.

Historically, any new technology threatening to displace humans was obviously met with resistance and backlash, that is hyper inflated by the connectedness of people today via social media and access to information.

On one hand I see companies profiting like mad and investing like mad on AI - I see extremely intelligent people from all various walks of life that are EXTREMELY bullish on AI and robotics.

On the other hand I see people almost completely dismissing the technology and basically saying that this is all a pipe dream. An advanced auto-complete.

Hard to find an in-between.

I see people saying they’re being forced to adopt AI and use tokens and that token spend is more of a cost than just hiring a human.

I see headlines saying Anthropic is like 10x’ing their revenue every 2 damn seconds (joking - but they’re growing exponentially).

I see Anthropic, SpaceX, OpenAI all talking about going public - all of which in some way shape or form in this massive race of AI and futuristic racing towards science fiction level goals.

As a retail investor it’s really hard to get a thumb on the pulse of what “AI” is actually going to become.

As an investor i’m trying to be a diligent investor and stay informed - especially with my holdings in SMH and INTC.

In my heart, I agree with many of the bullish analysts who say things like “we are in the 3rd inning with a man on 2nd” - using a baseball analogy to where we are currently in the timeline of AI.

I see a lot of fear and greed in the market.

Makes you wonder how much the semiconductor space can grow and if it really can continue this massive exponential run.

Makes you wonder when these hyper-scalers are going to pull back on CAPEX spend (though they seem to not be slowing down).

Meanwhile I hear data centers are being abandoned.

Bottlenecks.

A bubble.

It’s an exciting time to be an investor but also very overwhelming.

Personally, I enjoy a little volatility and risk. Hence why i’m not all in on a simple index fund like the s&p. (I’m in it, but i’m also playing the AI trade like many other investors).

It does seem like everywhere you look in the market everything is overvalued, but yet earnings keep rising and the market is continuously proving to be resilient despite all the daily headlines of chaos.

I’m wondering if I should trim my positions in things like SMH and Intel but both the etf and companies inside that etf as well as Intel I truly believe are positioned amazingly to continue to benefit from this AI circus lol.

Intel is on par to compete with TSMC by 2029 with both companies starting production of 1.4nm chip technology around the same time.

Intel is positioned to provide CPU’s in an agentic landscape where cpu’s are 1:1 or even 4:1 now.

Intel is in talks with Elon for the Terafab project.

Preliminary deals have been made with Apple for its chips.

Intel offers top tier advanced packaging.

I won’t even go into the behemoths inside of the SMH etf and the moats that they have.

I’m just wondering what you all think.

I have a significant % of my net worth in these two investments alone.

I feel like deep down that this is only getting started.

That we are in very early stages and there is a lot of money being thrown around and a giant learning curve before all of this is perfected and we finally realize the return on this AI investment.

I feel like Intel and the companies within SMH as well as the MAG 7 are going to continue to carry the market - because that is largely been what has been happening - the AI trade has been propping up the entire equities market.

It seems like each month there is a new fear based headline and then continuously, despite volatility, these chip companies just continue to prosper.

Makes you wonder when or if it’s going to collapse or if this really is the 3rd inning of a 9 inning game?