AI Profit Flows Shift from Training Hardware to Cloud Platforms

The AI sector has been experiencing a significant rotation in profit flows from training hardware to cloud platforms, according to Moomoo's AI. This shift is being driven by changes in cash-flow duration and interest rates. As yields jumped, stocks like GOOGL (Alphabet) and META (Meta Platforms) rallied 3%, while SOXX (Semiconductors ETF) dropped around 6%. The AI believes that this rotation is a result of the sector's repricing based on its sensitivity to rate changes.

The Moomoo AI has identified three buckets within the AI sector: training hardware, platforms with real free cash flow, and ads/apps. The AI notes that INTC (Intel) and ASML were green, while SOXX was selling off. This has led to a significant divergence in performance between these two groups.

The Moomoo AI suggests monitoring ratios such as SOXX/QQQ and the rolling correlation of 10Y/TIPS vs SOXX to gauge the extent of this rotation. The AI also recommends using volume profile and swing highs/lows to determine support and resistance levels for stocks like NVDA (NVIDIA), GOOGL, META, PLTR (Pinterest), and SOXX.