The dominant theme for the markets since late 2022 has been the AI trade.
Since Chat-GPT was unveiled by OpenAI in November 2022, AI-related stocks have accounted for 75% of market gains, 80% of market profits, and 95% of capital expenditures.
Put simply, this bull market has effectively been on gigantic bet on AI. And over the last six months, several red flags have emerged in this investing theme.
First and foremost, OpenAI CEO Sam Altman admitted in August 2025 that the Ai revolution was in a bubble similar to that of the Dot Com bubble. It is HIGHLY unusual for someone whose wealth/ employment/ social clout is tied up with a particular technology to admit that said technology is in a bubble. One wonders what Mr. Altman knew at the time that led him to state this.
Soon after this statement, the AI-trade began to stagnate. Big Tech/ the Mag-7 which are THE primary AI-companies in the market, spending over $400 billion per year on the AI-build out peaked in September 2025. They’ve since traded sideways for six months. And unfortunately for the stock market bulls, the MAG-7 ETF has broken down out of a massive bearish rising wedge formation.
