AI boom shifts from Big Tech to silicon — momentum play on secondary chipmakers
Thesis
The AI boom is expanding beyond Nvidia to include other chipmakers like Micron and AMD, which added $2 trillion in value in Q2. While the 'Magnificent Seven' tech giants are selling off as investors question their massive AI spending, the companies supplying the actual hardware are still seeing strong inflows. Furthermore, a massive $25 billion expansion in power infrastructure by Brookfield signals that demand for data centers and the electricity to run them is only accelerating. The market is shifting focus to the 'picks and shovels' suppliers who profit from the AI build-out regardless of which software company wins.
Strategy approach
Build a rule-based strategy that enters long MU, AMD, and BE on D1. Entry conditions: Enter when the 20-day moving average of MU crosses above its 50-day moving average AND BE closes higher than the previous day. Exit conditions: 14-day max hold OR a 8% trailing stop from the highest close since entry.