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Imagine two teams of workers, swinging hammers in the desert sun, racing towards each other from opposite ends of a continent that railways have never crossed.
Skeptics in the East described this as an over-construction. They believed that the railroad men were laying lines faster than the country would need them, and were betting their fortunes on demand that had not yet appeared.
Then the final rise to Promontory Peak occurred. Within a decade, the volume of shipping crossing that line made skeptics look foolish. Infrastructure came first. The economy that needed it came roaring right behind him.
I bring this up because something almost similar just happened in AI trading, and if you only watched the headlines this week, you missed it.
The violent sell-off that rocked AI shares The past few weeks have not been the beginning of the end. It was a buying opportunity dressed up as a crisis, and I can show you exactly why.
There are a lot of investors now convinced that the AI boom has just cracked. They watched the semiconductor sector fall by six, seven, eight percent in one sitting and concluded that the music had stopped.
Here is the proof: micron(in) I reported the biggest increase I’ve ever seen from that company, and the stock jumped 15% after hours. This single edition mirrored the sell-out that had been accumulating ever since Broadcom (Afgo)“Very High Expectations Meet Very High Expectations” fatigue unleashed this wave of corporate earnings.
The hits and raises haven’t been enough for the market lately. Micron came to the table and said: This is a win-win and a lift for you, the market, what do you think about it?? The market said: Bought.
Everyone is screaming “bubble” right now, but the data suggests that this bubble has not started to inflate yet.
In this week’s episode, I’ll explain why the fundamentals have never broken, why the technical setup says we’re not close to a true top, and the careful screening I’m running to find the highest momentum dip buys in this market right now.
Stick around until the end, because this week’s full breakdown Being exponential It goes further:
The fundamentals never moved
So let’s review what’s really going on underneath the noise.
SpaceX (Spex) It’s not just shooting missiles anymore. It’s renting an account to Anthropicl GoogleAnd now to Artificial Intelligence Reflection also. This tells me that SpaceX has probably sold close to 90% of its current computing capacity, which means it has to build more.
More giant data centers.
More orbital infrastructure.
We’ve spent the last two years calling this a super race between four giants – Microsoft (MSFT), Amazon (Amzn), dead (dead)and alphabet (Google). Now SpaceX is making its way into the picture, and most markets still haven’t priced it in.
If SpaceX and Tesla (TSLA) The merger, as widely expected, results in more capital flowing directly into building AI infrastructure.
We’re talking about breakneck spending of $700 billion to $800 billion this year. Add SpaceX to the mix and next year it could exceed $1 trillion. Do the math out to 2028, 2029, and 2030, and you get estimates rising toward $1.1 trillion, $1.2 trillion, and $1.3 trillion in those years. This is not a slowdown. This is convergence.
Qualcomm (QCom) It just raised its long-term data center revenue target to more than $15 billion by 2029, with $5 billion targeted for 2027. This isn’t a one-year story. This is three consecutive years of structural growth included in the guide.
And underneath all of that, there’s a shift happening from generative AI to agentive AI — a shift from training workloads to inference workloads, a shift from GPU-intensive to CPU-heavy demand. This is exactly why intel (Intech), holding arm (arm)and amd (AMD) It has received a flurry of promotions and increased accolades recently. Capital expenditures are not slowing down. It is redistribution.
Technical news
Now, here’s where the dot-com comparison really matters, and where most people go wrong. I did a pure price action analysis: how far the Nasdaq 100 traded above its 200-day moving average during this AI boom versus the dot-com boom of the late 1990s.
From 1995 to most of 1998, Technology stocks It has risen steadily, trading just 10% to 15% above its 200-day average. It wasn’t until the parabolic phase — late 1998 through early 2000, after the Fed cut interest rates in the wake of the LTCM crisis — that the Nasdaq 100 went vertical, eventually trading more than 50% above trend by March 2000. That’s when the boom turned into bust.
Right now, throughout this AI boom, the Nasdaq 100 has averaged roughly 10% above its 200-day moving average. As of today, it’s about 13%. We never went vertical. We never got close to the 50% danger zone.
History tells me that every boom enters a vertical phase before it collapses, which means that this phase is still ahead of us, not behind us. Most of the money in the dot-com era was made in those last frenetic years – 1998, 1999, 2000. I think we’re still working that stretch, not past it.
What I watch, and what I buy
To be clear, I’m not avoiding all risks.
The K-shaped economy – the gap between the fortunes of Wall Street and Main Street – is something to watch closely, along with politics over the next couple of years.
But on the encouraging side, inflation is falling rapidly, oil has fallen to around $70 a barrel, and the 10-year Treasury yield has fallen to 4.4%, which should support borrowing and consumer spending in the coming months.
So this is my playbook…
Screen for stocks that have risen more than 50% year-to-date or more than 100% over the past year. Narrow the list to names that have fallen 10% to 20% in the past two or three weeks. Then require that they remain above the 200-day moving average. This combination (high momentum, healthy pullback, healthy uptrend) is where I look for high momentum buys right now, because the momentum that was is the momentum that will be.
We’re not in the ninth inning here. We are in sixth or seventh. Buy the drop!
note: For the full conversation, including more on the SpaceX-Tesla forecast and Luke’s live chart read, watch This week’s full episode of Being Exponential. And make sure of that Subscribe to being exponential on X (formerly Twitter) for more exclusive content.
