The sharp decline in technology and semiconductor stocks highlights five concerns: elevated valuations, slowing AI capital expenditure growth, weakening free cash flow, rising Treasury yields and tougher earnings comparisons.
However, falling share prices do not necessarily mean AI demand is collapsing. Companies such as $NVIDIA(NVDA)$, $Taiwan Semiconductor Manufacturing(TSM)$ and $ASML Holding(ASML)$ retain important competitive advantages, although valuations remain critical.
My take: I favour diversified, unleveraged ETFs over concentrated AI bets or leveraged products such as $ProShares UltraPro S&P500 ETF(UPRO)$.
Dollar-cost averaging reduces market-timing pressure but does not eliminate losses. Sustainable earnings, free cash flow and reasonable valuations matter more than chasing rebounds.
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