I have been sceptical about the AI trade. The main reason was that pricing for AI chips looked so out of whack for pricing for other chips, my assumption was that eventually supply would overwhelm demand and pricing would fall. I looked at TSMC pricing history, and thought we were similar to the dot com bubble. In other words, I felt like I missed the move, and it was all downside from here for AI related themes.
Adding to my caution was the lacklustre (until recently) performance of ASML. Equipment manufacturers tend to be very sensitive to order outlooks, and the weakness of ASML added to my caution.
But recent data points and ASML show that something has changed. And now I see the action, I am trying to trade the reaction.
