Investors Rotate Out of AI Stocks as Fatigue Sets In
The artificial intelligence trade shows signs of unraveling as money flows out of tech darlings into defensive sectors. The Magnificent Seven—Nvidia, Microsoft, Apple, Alphabet, Meta, Broadcom, and Oracle—have collectively dropped 2% since October’s peak while the rest of the S&P 500 gained 1.8%.
"I call it ‘AI fatigue,'" says Ed Yardeni of Yardeni Research. "I’m tired of it and I suspect a lot of other people are sort of wary of the whole issue." The shift marks a potential inflection point after three years of AI-driven market dominance.
Market rotation gains momentum as trillion-dollar valuations built on ChatGPT’s 2022 debut face scrutiny. Proponents’ promises of economic transformation and outsized profits now meet skepticism—and capital seeking alternatives.
