Peter Boockvar Sees Possible End to AI Trade as Nasdaq Falls 5%

According to CNBC, One Point BFG Wealth Partners Chief Investment Officer Peter Boockvar said investors were questioning a forecast for $1.2 trillion in capital expenditures next year and that the shift could mark the start of the end of the AI trade as it is currently known. The comments came amid concerns that restrictions on data center construction could affect companies’ growth prospects following Democrats’ strong performance in Tuesday’s midterm elections. The Nasdaq Composite fell 5% Thursday, entering correction territory at more than 11% below its record high set last month. The iShares Semiconductor ETF dropped 11%, its biggest decline since March 2020, while the Global X Artificial Intelligence & Technology ETF (AIQ) fell 6% and was down 15% over the past month. The Dow Jones Industrial Average lost more than 1,600 points. Cantor Fitzgerald’s Eric Johnston said the outlook for AI infrastructure construction had changed significantly and that the economy, consumers and earnings growth were tied to the buildout. Other investors said the AI trade was not necessarily over but that investors should be more selective. Newedge Capital Group’s Rob Sechan cited Microsoft Azure’s 48% year-over-year growth in its most recent third quarter as evidence that capacity, rather than demand, was constrained. Raymond James Chief Investment Officer Larry Adam described the broad selling as a buying opportunity for investors with a longer-term perspective. Josh Brown pointed to the 4.8% yield on the 10-year Treasury as a reason investors were reconsidering riskier AI stocks.