AI trade rotation tests semiconductor leadership as Nasdaq nears resistance
A shift out of technology and into value sectors is putting the artificial intelligence trade under renewed scrutiny as semiconductor shares test key support levels. The latest rebound in growth stocks, helped by strong SpaceX earnings, is raising the question of whether the move marks a fresh turn higher or only a temporary rally into resistance.
Highlights
- Todd Gordon trims 13.5% from AI-related holdings, increases energy and healthcare allocations, and establishes a 5% Nasdaq hedge via the PSQ ETF as rotation out of technology continues.
- SMH/S&P 500 and SMH/Nasdaq-100 ratio charts have peaked since June 1 and now test crucial support, warning of sustained semiconductor underperformance if levels break.
- Nasdaq-100 forms a double top between June and September, now retesting resistance near 30,000, prompting preference for value sectors over AI-linked growth stocks.
Portfolio moves and technical signals
As reported by CNBC, market commentator Todd Gordon says he trims 13.5% from the artificial intelligence-related portion of his growth portfolio, adds to energy and healthcare, and puts on a 5% hedge against the Nasdaq through the PSQ ETF as rotation out of technology persists.He points to ratio charts comparing the VanEck Semiconductor ETF, SMH, with both the S&P 500, SPY, and the Nasdaq-100, QQQ, over the past year. Those ratios peak around June 1 and have lagged both benchmarks since then, despite continued investment around AI build-out. Gordon says both ratios are now sitting on support, and a break below those zones would confirm that the move out of semiconductors is continuing.
What the setup means for investors
The second chart Gordon highlights is the daily view of the Nasdaq-100, where he says a double top forms between the June and September highs, followed by a break of the uptrend line and the 21-day and 50-day moving averages.He says the latest rally is pushing the Nasdaq-100 back up from below to retest broken support, which may now act as resistance near 30,000. Based on current positioning, Gordon expects that resistance to hold, favoring value-oriented sectors over AI-linked growth names. If that view proves wrong, he says the hedge would be lifted and the trimmed allocation would be redeployed, likely at higher prices.
Our earlier coverage of the Nasdaq 100’s pullback highlighted how the index slid below its 20-day and 50-day moving averages as selling pressure picked up after the latest US inflation data, alongside an unusual drop in Treasury yields. We also outlined the tug-of-war between short-term bearish momentum and a still-intact longer-term structure above the 200-day average, flagging key support and resistance levels traders were watching for confirmation of the next move.
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