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The AI Repricing

Nick Schmidt

Nasdaq broke to new highs this week making it the fastest recovery I've ever experienced. I pointed out the decisive candles with the green arrows in last week's report, something I have mentioned over the past few weeks that I like to see to indicate the bottom is in. The candle this week looked even more decisive.

QQQ
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Last year had almost identical action. Big decisive candles indicating follow through. It then went up so fast everyone doubted it, then gapped higher and kept going higher.

QQQ
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We're extended and we'll pull back for sure but early in a cycle like this with such a sharp recovery by the time it shows up you'd already have built a big cushion being in to withstand it. These early uptrends are the only windows I buy strength just because its the only way to get in.

Whats most important though is this action is being led by growth stocks breaking out of multi-month bases. The participation is broad and we have the stocks leading that are needed to lead.

Semis are the most important group and the breakout to new highs last week in SMH followed through powerfully again. The full AI infrastructure stack every layer is moving together powerfully which indicates a big repricing in AI spend.

For months we have not seen any breakouts stick or follow-through and the past 2 weeks have been a totally different market.

SMH$464.16
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My Focus

6 charts
MU$455.07
Memory
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Focus because of the base, shakeout candle, fundamentals, has all the ingredients. I may add if it pulls and retests the base pivot ~430.
AMD$278.39
Semiconductor
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AMD basing for months with strong breakout. Still buyable, would like to see an inside week like TER had retest base pivot that would make great entry.
CLS$396.01
AI Hyperscalers & Neoclouds
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One of the best base breakouts. Same pattern... push to top of the base came quick and feels extended, then follow-through. Characteristic of this market has been that follow through. Any weakness that shows respect for prior ATH 364 level or deeper but holds base pivot I would buy.
GLW$164.38
Fiber & Networking
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Broke to new highs then quiet inside week retest. Same pattern. I would watch weakness to 154 level or another inside week.
SATS$133.21
Space & Defense
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Break to highs out of a base, retest and trying to go. Similar pattern everywhere. I like this for entry around 126 level. I would have bought this last week if I had the money I got back from NFLX failed trade.
TSLA$400.62
Robotics
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Earnings this week. Have a feeling Elon will discuss the new Tesla AI chips and could set off the major rally out of the 5 year base. Took a position against my normal weakness-buyer bias because the character matched GOOGL, AMZN, and CRWV earlier in the week. If I cant get enough cushion before earnings I will exit and wait to buy back.

Notable Charts

60 charts
Semiconductor+10.2% avg
20 names6 notable
This year the bottleneck shifted to the layer making the chips themselves, which is a better setup for the equipment makers.
Names
ALAB+16.8%ONTO+13.1%TER+3.4%LRCX+1.5%AMAT-0.6%ASML-1.3%
ALAB$174.05
Semiconductor
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ONTO$290.76
Semiconductor
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TER$380.38
Semiconductor
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Current position and good action. Pushed to new ATH 2 weeks ago when I bought, successfully retested prior ATH last week before making new highs. Resistance to support.
LRCX$267.60
Semiconductor
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AMAT$396.94
Semiconductor
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Current positions so far acting similar to what we've seen. Breakout -> inside week resistance to support flip. Now want to see it follow through soon. As long as it holds that base pivot the breakouts instance and risk can be managed vs it.
ASML$1459.80
Semiconductor
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Memory+8.1% avg
1 names1 notable
Memory is quietly the biggest way to play AI. The special memory chips AI training needs take up a lot more room in the factory than the regular memory that goes in a laptop, so the factories fill up and all memory prices get dragged higher together. MU is telling customers they can only get about half of what they're asking for. Biggest position in my book.
Names
SNDK+8.1%
SNDK$920.99
Memory
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AI Hyperscalers & Neoclouds+11.8% avg
7 names2 notable
The bear case on CRWV and NBIS was always that GPUs lose value fast, rental prices come down, and the stocks hurt. The latest numbers show the opposite happening. Rental prices are up 40% since October, every company renting out GPUs is sold out, customers are locking in the higher rates for 5 years, and the stocks still haven't caught up to that. The big AI playerd on top (GOOGL, AMZN, META, ORCL) are also saying they can't buy enough GPU capacity through 2026.
Names
DELL+10.5%NBIS+8.4%
DELL$196.55
AI Hyperscalers & Neoclouds
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NBIS$157.14
AI Hyperscalers & Neoclouds
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Meta just added $27B in March on top of the existing $17.4B Microsoft deal. Order book stacking.
Software+25.8% avg
3 names1 notable
Names
BAND+42.6%
BAND$23.01
Software
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AI Power+12.2% avg
9 names4 notable
Names
APLD+20.1%CIFR+17.2%HUT+13.3%SOLS-0.9%
APLD$31.53
AI Power
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CIFR$19.37
AI Power
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HUT$74.90
AI Power
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SOLS$81.20
AI Power
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Fiber & Networking+7.1% avg
6 names3 notable
Names
COHR+12.2%VIAV+5.6%LITE-0.4%
COHR$345.02
Fiber & Networking
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VIAV$44.14
Fiber & Networking
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LITE$894.07
Fiber & Networking
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Space & Defense+9.1% avg
8 names
Strong group strength here shows growth participation broadening. The government is showing up as a big recurring buyer. Idk how the group reacts to SpaceX ipo but looks good now.
Quantum Computing+45.7% avg
4 names1 notable
Group ran together again looking like it could see another big move in quantum. Speculative group for now it trades on catalyst and sentiment so holding any of these means not marrying the position. I treat these more as swings.
Names
QBTS+52.2%
QBTS$21.69
Quantum Computing
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Storage+8.7% avg
2 names1 notable
Names
STX+8.9%
STX$547.75
Storage
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Now extended for a good entry but the follow through is a good sign of the market and good to keep on watch for future entry.

Watchlist

ThemeNamesWeekBreadthLeadersFocus

Quantum Computing

4
+45.7%
100%
IONQ +60.1%QBTS +52.2%QUBT +35.6%RGTI +34.9%
-

Biotech

1
+40.8%
100%
TVTX +40.8%
-

Fintech

2
+33.2%
100%
DAVE +35.2%HOOD +31.2%
-

Software

3
+25.8%
100%
BAND +42.6%RNG +20.6%PLTR +14.3%
-

Robotics

1
+14.8%
100%
TSLA +14.8%
TSLA

AI Power

9
+12.2%
89%
BE +24.7%IREN +22.4%APLD +20.1%CIFR +17.2%
BE, IREN

AI Hyperscalers & Neoclouds

8
+11.9%
100%
ORCL +26.8%CRWV +14.6%CLS +12.7%DELL +10.5%
CRWV, CLS, NBIS, GOOGL

Semiconductor

21
+10.4%
90%
CRDO +34.4%ON +20.9%ALAB +16.8%ICHR +14.3%
AMD

Storage

2
+8.7%
100%
STX +8.9%WDC +8.5%
-

Space & Defense

9
+8.3%
86%
RKLB +24.6%FLY +16.5%RDW +11.3%ONDS +9.5%
SATS

Memory

2
+8.1%
100%
MU +8.2%SNDK +8.1%
MU

Fiber & Networking

7
+5.5%
71%
UI +17.2%COHR +12.2%AAOI +5.9%VIAV +5.6%
AAOI, GLW

Consumer

5
+4.2%
100%
SPOT +12.7%TPR +3.7%AAPL +3.7%WMT +0.6%
-

Materials

1
-10.1%
0%
AA -10.1%
-