For three months, the AI trade has been moving backwards, but this week the unwind finally began to look less like an ordinary correction and more like capitulation. That distinction matters because markets often become most dangerous when everyone is still convinced the original story cannot fail, but they often become most interesting once the positioning has been cut, the narrative has turned sour and investors begin assuming the negative momentum will simply continue indefinitely.
That is the argument Mark Wilson at Goldman Sachs is making in his latest weekly work.
• Mark Wilson at Goldman Sachs thinks the AI unwind has moved far enough that positioning and sentiment may now be overshooting the underlying fundamentals.
• The hedge-fund damage has been severe, especially in Asia and TMT, but Goldman still sees no convincing evidence that compute demand or pricing has rolled over.
• The next phase may be less about chasing every AI beneficiary and more about separating the biggest self-funding spenders from the weaker parts of the financing chain.
• Bonds have finally started to behave like a hedge again, which could matter just as much as the AI positioning reset if yields have genuinely exhausted their latest move.