@nerdbull1669 best matches my view. I don’t see this as investors abandoning AI for defensives. It looks more like the market is becoming less willing to reward AI spending without evidence of returns.
The next phase should favour companies that can convert AI investment into revenue, margins and free cash flow, while companies relying mainly on expanding valuations may struggle. In that sense, the “Buffett Trade” is less about buying PG or KO specifically and more about demanding capital discipline.
What would change my mind? If tech companies can sustain strong earnings and FCF growth despite huge capex, while their valuations remain resilient even with elevated Treasury yields, I’d view the recent defensive rotation as temporary shelter rather than a lasting shift towards value.
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