AI bubble fears shake out the market — scoop up the real winners behind the boom
Thesis
An international financial watchdog is officially warning that AI stocks are in a bubble and could trigger a market slump, which is making many investors nervous. However, underneath that fear, Wall Street is practically screaming that companies like Micron and Lam Research are seeing an unprecedented, multi-year boom in real profits and equipment orders. When panic from broad market warnings temporarily knocks down these fundamentally strong companies, it creates a perfect opportunity to buy the dip on the companies actually building the AI infrastructure.
Strategy approach
Build a mean-reversion long strategy on MU and LRCX using the H4 timeframe. Enter a 1/3 position when the stock's 14-period RSI dips below 35. Add another 1/3 if RSI drops below 25. Exit fully if RSI crosses back above 60 or if the stock falls 10% below the initial entry price.