These AI Stocks Are Poised For A Comeback |MU, AMD, COHR, & More

Is the recent AI stock selloff the beginning of the end—or the buying opportunity of a generation?

In this episode of Being Exponential, Luke Lango explains why he believes the latest correction in AI stocks, semiconductors, and AI infrastructure is not a reason to panic, but a chance for long-term investors to position themselves for the next leg of the AI revolution.

Luke compares today's AI market to the dot-com era, separating fact from fiction and explaining why the current AI cycle is fundamentally different. Are we witnessing a replay of the internet bubble—or are we still in the early innings of a multi-decade technology transformation?

Next, Luke analyzes market sentiment and why, despite recent volatility, the tape simply isn't hot enough to signal a true market top. From institutional positioning and investor psychology to AI capital expenditures and earnings growth, he breaks down the indicators he believes investors should actually be watching.

Finally, Luke reveals the sectors and stocks he believes are best positioned to outperform as the AI bull market resumes. From AI infrastructure, semiconductors, memory, networking, and Edge AI to the companies leading the next phase of artificial intelligence, he shares where he sees the biggest opportunities following the pullback.

If you're wondering whether to buy the dip, rotate into AI leaders, or prepare for what's next in the market, this episode is packed with actionable insights.

🎧 Subscribe to Being Exponential with Luke Lango for weekly analysis on AI investing, tech stocks, macro trends, semiconductors, and exponential technologies.

Transcript

SPEAKER_00 0:00

Hello and welcome to Being Exponential. We are still in remote locations, different locations, but we did want to make sure we update you all on the market. So we're going to be talking about the AI sell-off today. So look, it looks like everything kind of started off or the tip of the sphere was the Broadcom earnings report. And it's just been a recent trend over the past couple of earnings where there's extremely high expectations, and these AI companies are meant to not only meet those but exceed those. And then once that didn't happen, it looks like uh emotions got the better of investors. So what what's your takeaway on the recent AI sell-off here?

SPEAKER_01 0:36

Well, that was the case until it wasn't, until Micron reported earnings, and then it all reversed course, right? You know, this this trend of beaten raises not being enough. Well, Micron came to the table and said, Here's a beaten raise for you, Market. What do you think about that? I mean, Micron reported the biggest beaten raise uh that I've ever seen, and the stock jumped 15% after hours. Uh, we'll see if it holds the gains, but that's a massive, massive, massive move, and it looks like it's gonna reverse course uh this AI sell-off that we've been seeing. Uh, what happened is just, I mean, this is just natural jitters, right? The sell-off is incongruent with the fundamentals on AI stocks. That everything that I am reading is fundamentally bullish for the AI infrastructure trade. Whether it's SpaceX renting out, you know, they got the big compute deal with Anthropic, with Google, they just had a new one uh with Reflection. They're they're clearly creating more or like renting out compute. Now, what that tells me is they're gonna become a compute builder, right? What that tells me is that they've already rented out probably 90% of their compute, and that means they're probably sold out, and so because they gotta have something, some for Grok and XAI. And so that means they're gonna build more Colossus data centers. It means they're really gonna double down on the orbital stuff, like they're becoming a new hyperscaler. So what we thought was you know a hyperscaler race of let's call it four Titans, right? Oracle's in there, but the four Titans were Microsoft, Amazon, Meta, and Google is now becoming uh the Fantastic Five race, right? All of a sudden, SpaceX is is in the game, and everybody thinks SpaceX and Tesla are gonna merge, and I agree they are going to merge. And so when they do merge, that's gonna be more funding that goes into the AI trade. So you're talking about hyperscaler spending of 700, 800 billion this year. If SpaceX really does get into the mix here, then which I think all these deals suggest that they very much are going to, then you're talking probably over a trillion dollars next year. And then all of a sudden estimates for 28 and 29 and 30 move up too to 1.1, 1.2, 1.3 trillion dollars in those out years. So that's super bullish, right? That's fundamentally very bullish because that means more spending on compute, more spending on uh memory, more spending on optics, more spending on networking, cooling equipment, power, et cetera, et cetera. So that happened. That's super bullish. Uh we have Qualcomm increasing their long-term data center revenue targets, $15 billion plus by 2029, uh, $5 billion in 2027. That's super bullish because that's it, that's a 2029 target, right? That's not just saying 2027 is gonna be a good year. That's saying 27 is gonna be good, 28's gonna be good, and 29 is gonna be good. So now we got 36 months of of runway of massive growth uh ahead for for Qualcomm. So that's structurally bullish for this trade. Everybody's upgrading the the microns of the world and the AMDs of the world and the ARMs of the world and the Intels of the world. AMD ARM and Intel are getting a lot of upgrades, in particular recently, because of this shift from generative AI to agentic AI, which is a shift from training to inferencing, which is a shift from GPU workloads to CPU workloads. And so now all of a sudden these companies that make a bunch of CPUs are going to see a bunch more demand, and that's Intel ARM and AMD. So you're getting a bunch of estimates moving higher on those names and price target upgrades and boosts and all that stuff. So really just everything I'm looking at in the AI world when we're talking fundamentals, what what are the core businesses doing? Are companies using AI? Is there ROI on the AI? Is the spending continuing? Is there runway for the spending to continue? Is the outlook for the spending to rise? All of are the estimates still moving higher? Is Wall Street generally still bullish? Yeah. I mean, just like across the board universally, without exception, unequivocally, yeah. And so when I have that backdrop of relentlessly strong fundamentals, and then I see AI stocks, you know, SMH, that semiconductor ETF drop five, six, seven, eight, nine, ten percent. Buy the dip. Right. I think between where we are 600 to 620 is like the buy the dip zone on uh on SMH, and that's kind of where where we got to, and then we're bouncing. And I would continue to view that as an accumulation zone. Any chop in AI right now is a buying opportunity. Eventually that that will not be true, uh, but for right now it very much is true. Excellent.

SPEAKER_00 5:25

So, Luke, I I guess my question here is I I agree. I agree with you fundamentally um that it is a buying opportunity. We've seen this countless times over the past year where it's like, oh, the the AI trade is over, oh, the AI trade is dead, and then next thing you know, you know, a company like Nebius is back up a hundred percent um uh from where it traced back down to. Uh so my question would be what is a realistic headwind that could pop up that we should be worried about?

SPEAKER_01 5:51

Okay, well, I I think the one thing you have to worry about is when we get too hot, and we just haven't gotten too hot, like at all. So I ran an analysis this past week, which was looking at just price action, pure price action. You know, how how hot is the tank, if you will. During the dot com boom, the NASDAQ 100 from 1990, so the dot com boom started with the launch of Netscape in late 1994. From early 1995 to late 1998, the NASDAQ 100 went higher. Tech stocks went higher, but it was a very steady rally. That is, throughout that period, 95, 96, 97, and most of 98, on average, the NASDAQ 100 traded about 10 to 15 percent above its 200-day moving average. So it never got too extended from the primary uptrend line, right? Like it just kept on grinding higher and moving higher, you know, slowly but surely. Well, not slowly but surely, but just kind of steadily, right? Steady. But then came the vertical phase, then came the parabolic phase where tech stocks did go absolutely vertical and it just became too much. And that was from late 98 to early 2000 when the Fed cut rates in late 98 in response to the LTCM crisis. Um, and that just that unleashed a wave of capital of liquidity into the markets. And from late 98 to early 2000, the Nasdaq tripled in value, and the Nasdaq 100 raced to more than 50 percent. It traded more than 50 percent above its 200-day moving average by March of 2000, which is when the bubble did pop, which is when that bull market did peak, when the dot-com boom turned into the dot com bust. So, more or less from a price action perspective, that market got too hot when tech stocks got 50% above the primary price trend. Where are we right now? 13% throughout 2023, 2024, and 2025, ChatGPT launched in late 22. So AI bull market 23, 24, 25, and here we are in the first half of 26. Throughout that entire time, on average, the NASDAQ 100 has traded about 10% above its 200-day moving average. It has never really gotten more than 20, 25% above its 200-day average. We have never had that gone vertical phase. Now, what history tells me about booms is that all booms enter a go vertical phase before they turn into a bus. So I think we are still due for the go vertical phase, which means at some point in the next one to two years, the NASDAQ 100 will become detached from its primary trend line, will trade 50% above its primary trend line, above its 200 day moving average, and that will be a sign to worry. But the fact that we are not there yet is a reason to stay long. The most money was made in 98, 99, and 2000, those last three years of that dot-com boom. So I think we still have the go vertical phase left, the parabolic phase left, that blow-off top, as a lot of people call it. So technically, I think that's one thing you have to look out for. And I'm not seeing any warning sign of the price action.

SPEAKER_00 9:09

Okay, so we have companies like Sandis that have gotten uh, you know, four digit percent returns. Uh so we could consider those kind of outliers in terms of the the ticker, the the take being too hot.

SPEAKER_01 9:22

Yeah, I mean, in any market, you're going to have individual stocks that just get really hot and run away. That'll happen in bear markets, that'll happen in bull markets, that'll happen in pig markets, that'll happen at all times. You can't really look at the outliers and characterize the market action by the outliers. You characterize the market action by the averages, by the standards, right? And the averages right now are just not detached from reality. Valuations are not that extreme. Uh technicals are not that extended. Um, estimates and and earnings are still very much intact and rising and look very healthy. So there's just there's not really a warning sign there. I mean, we've talked about fundamentally what I'm looking for. I think politics can change things in the next two years. Um, I think the K-shaped economy just getting too far detached, like the upper part and the lower part of the K getting too far detached is is something to watch for. Wall Street and Main Street becoming too far disconnected is something to watch for. Uh, consumer spending is something to watch for. But we're, you know, consumer spending, the outlook there is actually improving in the short term. Um, inflation is is dropping. We're at 4.2 on May CPI, but the Cleveland Fed now cast is at 3.96 on June CPI. And with oil coming down to $70 a barrel, we were just at 100. You know, we're probably looking at lower threes inflation by the end of the summer. So we have massive disinflation on deck over the next three to four months. That should help consumers dramatically. Long-term treasury yields have come down, the tenure is down to 4.4. That should be really helpful for uh loaning for loans and borrowing and things like that leverage. So um I there are risks to monitor, and I understand that eventually these risks will rear their ugly head or their ugly heads all at once, but right now I'm just not seeing it, man. I just am not at all. Right now, everything I am seeing, and I am trying to be as objective as possible because I'm worried. I mean, I'm I'm worried about a crash, an impending crash. I am. I lived through that 2022 tech stock murder massacre that killed a lot of really high flying tech stocks. I lived through that. Um, I understand that. Like, that was painful for we bounced back from that, and a lot of stocks bounced back, and everything's all fine now. But at the time, man, that was horrible. It felt like the world was ending. Like, I want to watch out for those signs again to make sure that you know we exit before another crash like that. Because another crash like that will inevitably happen. So I am watching, I am watching all the signs, but I'm just not seeing anything to say head for the exits. You know, I'm seeing signs to say keep watching the show.

SPEAKER_00 12:04

Essentially, we're we're we're running off the mindset that we've talked about on the show before. We're not in the ninth inning, we're likely in the sixth, seventh inning. So we'll keep an eye out for the potential headwinds, another big one being, you know, the political landscape. Uh, however, these are by the dip opportunities realistically. Um, my question for that would be: do you have any high torque plays that that that we should be looking at?

SPEAKER_01 12:31

Well, I mean that yeah, that's kind of what we've talked about recently, is right. I mean, a couple weeks ago, uh, when I was up in Montana, we talked about the networking place. Uh, and those that was a great time to buy those those stocks. Um, last week we said there was a great entry on space stocks. I am still maintaining, I think now is a great time to be buying the dip in space stocks. I think the the recent, I mean, you got a 50% drawdown in some of these names. Um, I think that's a great entry point on short-term entry point on some great long-term winners. So I I like the networking dip, the networking stocks that have bounced back already. I I wouldn't chase any more. Uh, I like the the dip in the in the space stocks right now. Um, I like the breakout in Micron, we talked about that. I like the dip in Qualcomm, we talked about that uh in the podcast earlier this week as well. Um I just think that there's a lot of if I were buying the dip right now, what I would do is I would look at what stocks is a momentum market. So what stocks are having a bunch of success? Run it run a screener on stocks up more than 50% near to date, stocks up more than I don't know, 100% over the past year. Then take that group and run an additional screener on it and say which ones have pulled back 10 to 20 percent in the last two to three weeks from their 52-week highs. And then run an additional screener on that and say, additional condition and say, all right, I want the stock to still be above its 200-day moving average. And then look at that group of stocks. And I think you're going to have a very high quality group of potential dip buying opportunities that you want to follow the momentum. The momentum that was is the momentum that will be. Because the fundamentals of the economy have not changed, the fundamentals of the AI trade have not changed, the fundamentals of this, you know, hyperscaler, capex, the spending plans have not changed. And because those things have not changed, the momentum that was is the momentum that will be. So those are the names that I would look to be buying on dips. The high momentum names that have had a lot of success in the last six months, last 12 months, which have pulled back 10 to 20% in the last two to three weeks to major technical support while maintaining the primary uptrend lines, a two-and-day moving average. Those are the stocks I will be buying right now. So, you know, I like I said, we've kind of talked about a few of these stocks and on the few of the other podcasts, but that's that's the bucket I'd be looking at.

SPEAKER_00 14:55

Excellent.

SPEAKER_01 14:56

Okay.

SPEAKER_00 14:56

All right. Uh I think that's it for me, unless you had uh any additional closing remarks there, Luke.

SPEAKER_01 15:01

No, I think that's where the focus should be this week, right? The focus this week should be the AI stock complex has been hit pretty hard. You know, when you see SMH down six, seven percent a day, you're like, woof, that's rough. But then keep in mind, SMH is up, what, 100% year to date. So, like if you're gonna have a stock or an ETF or a group of stocks that go up 100% in six months, they're gonna also go down 10% in a day sometimes. That's just what happens. There's no such thing as a stock that goes up 100% in six months and then has no pullback. Doesn't happen. Doesn't exist. So if you're if you want that 100% upside in six months, you gotta live with a 10% pullback, you know, on a day like Tuesday or a you know, 20% pullback over the course of a week. That's what happens when you have high torque stocks or high torque ETFs or momentum markets, momentum plays. So uh the thing you have to understand is is the or the question you have to answer is is the momentum shifting? Is it changing? And I don't think it is. I think the momentum is going to stay, the trade is gonna stay alive, it's gonna stay intact. So buy the dip.

SPEAKER_00 15:59

Excellent. Yeah, you're missing the forest for the trees if you don't realize you're still up 90%, right? With that, we will end the episode. We will see you next week and we will look much better. All right, take care, folks.