AI's gains have been unusually concentrated. While the S&P 500 rose only about 8%, memory and AI infrastructure names surged several hundred percent, showing how selective this rally has been.
Q2 earnings are the next major test. Strong AI-driven revenue, margins and capex could justify current valuations. Any signs of slowing demand or weaker guidance could trigger sharp profit-taking.
For H2, I'd avoid chasing memory after its huge run. I'd keep core exposure but gradually diversify into other AI infrastructure areas such as power, grid equipment, cooling, networking and cloud. The AI theme remains intact, but spreading exposure across the value chain offers a more balanced risk-reward than doubling down on the year's biggest winners.
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