What I did notice this week is if there is anything to the Deepseek story of a more affordable AI process with China.  It seems that the story became big around the same time Big Tech pledged 500 billion dollars to AI.  That is a good thing for Frank to unpack after he rescues his drone start up from the LA wildfires.  Thankfully, that is going well and Frank will be back this week.

This valuation thing is nagging at me for AI stocks.  Specifically the Great 8 stocks that have run so far on the promise of AI.  Is it worth staying in all these stocks?

Margins in AI chips are too big to ignore

Intel Corp (Ticker: INTC) was once unstoppable but the stock peaked in 2000 and has never regained its former glory.  Andy Grove, the CEO when INTC was at the top, famously said, “only the paranoid survive.”  He was right.

Right now Nvidia Corp (Ticker: NVDA)  is king and trading at massive valuations.  This will be an interesting dance as the Trump Administration deals with China and the considerable market cap heaped into the NVDA ecosystem.  The earnings for this cycle will still be huge but this is the year for new competition.

My question is if it is easier for NVDA to rally 50% or INTC?  Right now, chip foundries have all they can handle and INTC might make a go of their business.  INTC looks compelling down here.  One thing I have noticed with FLASH 10 and how stocks trade in general is the market can love them, hate them and love them again.

Time to look at the other stocks in the QQQ, after all there are 92 of them.

To Your Trading Success,

AG