AI spending hangover hits Asian chipmakers — short the semis as the $2T rally cr
Thesis
Chip stocks just had a historic quarter, adding $2 trillion in value as the AI boom expanded beyond Nvidia. But the mood has completely shifted: Samsung and SK Hynix both plunged over 7% overnight as a US tech sell-off spread to Asia, driven by fears that Meta selling computing power signals an oversupply in AI capacity. When a sector gets this crowded and heavily bought, any negative news can trigger a domino effect. The combination of overvaluation after a record quarter and sudden fundamental doubts about AI capacity creates a high probability of further near-term selling pressure.
Strategy approach
Build a rule-based mean-reversion strategy that enters short SMH on D1 when the ETF closes down > 2% from the previous day's close AND the 14-day RSI drops below 65. Set a tight 4% stop loss above entry and a 10% profit target.