Big Tech spending panic meets booming AI demand — long the AI chip suppliers
Thesis
Micron's blockbuster earnings proved the AI spending cycle is just getting started, yet major tech buyers like Microsoft and Apple are facing heavy sell-offs over fears of capital intensity and consumer price pushback. This divergence shows investors are fleeing the high-profile consumer tech brands but the underlying build-out of AI infrastructure remains incredibly strong. By going long the essential AI hardware suppliers like Micron and TSMC that are still seeing quadruple-digit revenue growth, traders can play the actual AI boom while avoiding the big-brand software and consumer stocks that are currently being repriced.
Strategy approach
Build a rule-based strategy that enters long MU (Micron) on D1 when MU's Relative Strength Index (RSI, 14-period) crosses above 40 (recovering from oversold conditions) AND MSFT (Microsoft) closes down more than 1% for the session. Exit when MU reaches a new 10-day high or after a 15-trading-day max hold. Apply a 6% stop loss from the entry price.