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Let me tell you something that’s been driving me absolutely crazy — and I don’t use that phrase lightly.
We’re watching chip companies and AI stocks posting incredible earnings results, yet the market keeps selling them off. Part of this comes down to pure volatility. We were down about 200 points on the Nasdaq 100 (QQQ) recently, which is beyond random.
The Dow dropping 126 points is nothing, but 200-plus on the Nasdaq 100 is substantial — and that kind of movement can spook investors into latching onto whatever narrative sounds convenient.
And that narrative, according to Wall Street, is that AI companies are spending too much money building their infrastructure. I’m going to be blunt here: I think this is the biggest crock of nonsense I’ve ever heard in my life.
These companies are spending more because there’s massive demand for their products and services. Applied Materials (AMAT) just killed it on earnings — and yet investors are somehow worried about spending? It makes zero sense.
Now, am I going to respect the market’s movement? Of course I am. But personally, I’m calling this what it is — phony baloney.
The Two Separate Issues Everyone’s Confusing
There are actually two distinct concerns floating around, and Wall Street is mixing them together.
The first is the infrastructure spending issue, which is a big no in my book — it’s silly to worry about companies spending money when demand is through the roof.
The second concern is the idea that AI technology is going to disrupt other industries. That’s legitimate in theory, but it’s still speculative and probably won’t materialize for another couple of years or more.
We’re not seeing real disruption in the market yet. If anything, broader indicators show stability. Gold is doing exactly what it should — consolidating instead of breaking down.
The longer it holds steady, the more it relieves pressure on the market. And interest rates are showing strength too. The recent upward movement in bonds is actually positive, but the real question is why it’s happening.
Is it a flight to quality or natural buying? That’s the kind of nuance that actually matters for tech valuations.
If AI disruption were truly happening right now, we’d see weakness across the board. But the Invesco S&P 500 Equal Weight ETF (RSP) is still making new highs and looking great. That tells you everything you need to know — broad market participation aside from just the mega caps.
What This Really Means for Your Trading
The reality is simple: This whole thing is about mega-cap tech valuations, not genuine disruption. The disruption story is way ahead of reality and sentiment is driving price action — not fundamentals.
And when disruption does eventually arrive, industries will adapt by buying the very computers and technology they supposedly fear. It’s a self-reinforcing cycle, not a death sentence.
So while I’ll respect the market’s current direction, I’m not buying into the narrative. The earnings are strong, the demand is real and this sell-off is based on speculation rather than facts.
Just my two cents — but I’d love to hear if you’re seeing something I’m missing.
I hope that helps!
Roger Scott
Roger Scott Trading
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