--- title: "Is the AI Bull Market Over? Market Filled with Doubts" type: "News" locale: "en" url: "https://longbridge.com/en/news/293087285.md" description: "Nomura Securities points out that despite strong earnings from tech companies, stock prices have not risen, and the path to the end of the AI boom has become complicated by multiple intertwined scenarios. The market faces four potential turning point scenarios, blurring the cost-benefit balance. Divergence within the tech sector is intensifying, with semiconductor stocks falling and software stocks strengthening. As earnings reports from hyperscale cloud providers approach, the market has not yet fully priced in a slowdown in AI investment, leaving investors in a state of doubt and wait-and-see" datetime: "2026-07-18T04:03:24.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293087285.md) - [en](https://longbridge.com/en/news/293087285.md) - [zh-HK](https://longbridge.com/zh-HK/news/293087285.md) --- # Is the AI Bull Market Over? Market Filled with Doubts Strong earnings and aggressive capital expenditure plans from tech companies have failed to drive stock prices higher—a divergence that is confusing investors. The path to the end of the AI boom has evolved from a single narrative into a mix of multiple scenarios, significantly increasing market uncertainty. According to Zhuifeng Trading Desk, Nomura Securities strategist Naka Matsuzawa pointed out in a report released on July 17 that the cost-benefit balance of AI investment has become blurred. Market participants are facing various potential "AI boom ending scenarios" and are currently in a state of doubt and wait-and-see. Meanwhile, there is a clear divergence within the tech sector: semiconductor stocks have fallen sharply, the MAG7 stocks are flat overall, and software stocks are bucking the trend to strengthen, indicating that repricing within the sector is quietly underway. In the next two weeks, US hyperscale cloud providers (hyperscalers) will sequentially release their earnings reports and disclose capital expenditure plans. **Matsuzawa pointed out that even if the relevant data performs strongly, it is difficult to predict whether the market will respond positively given the complexity of the aforementioned scenarios.** The bond market has not yet seen bets on rate cuts driven by expectations of a slowdown in AI investment, meaning that the market has not yet completed pricing in the end of the AI boom. ## Multiple Scenarios Superimposed, Path to End of AI Boom Becomes Complex Previously, the market mainly evaluated potential turning points in the AI investment cycle around three scenarios: **First, overheating in AI investment compresses the cash flow of hyperscale cloud providers, leading to a slowdown in investment; second, high memory prices push up investment costs, triggering a contraction in AI spending; third, rising raw material costs exacerbate inflationary pressures, prompting central banks to adopt a hawkish stance.** **However, according to the Nomura report, the market is currently wary of the emergence of a fourth scenario—high memory prices trigger overheating in semiconductor investment, subsequently leading to a decline in memory prices. In short, the cost-benefit balance that artificial intelligence brings to the broader economy has become blurred.** Semiconductor stocks had previously continued to rise due to soaring memory prices, but this trend now seems to have reached a turning point. The coexistence of these four scenarios makes it increasingly difficult to clarify the cost-benefit balance that AI brings to the overall economy. Matsuzawa believes that it is precisely this multi-path uncertainty that has left market participants in a state of doubt and wait-and-see. ## Divergence Within Tech Stocks Intensifies, Strong Performance Fails to Gain Market Recognition A core contradiction in the current market is that while tech companies have healthy earnings and active investment plans, this has not translated into momentum for rising stock prices. This divergence has been particularly prominent recently. From a sector perspective, semiconductors and MAG7 stocks are weak, while software stocks are relatively resilient. In the broader US stock market, defensive sectors and consumer-related stocks are performing strongly, while technology, capital goods, and banking stocks are generally under pressure. The VIX index has rebounded to 16.7, while volatility indicators in the bond and foreign exchange markets continue to decline, indicating that current uncertainty is mainly concentrated in the stock market. **Matsuzawa pointed out that even if hyperscale cloud providers release impressive earnings reports and capital expenditure plans in the next two weeks, the market reaction across sub-sectors will be difficult to simply predict due to the interference of the multiple scenarios mentioned above—strong data may not necessarily bring a broad boost across sectors.** ## Bond Market Has Not Priced in End of AI, Rate Cut Expectations Remain Distant A signal worth noting is that if the market were truly beginning to price in the end of the AI boom, there should be buying in bonds—as investors would position themselves in advance for future rate cut expectations. However, this situation has not yet occurred. According to the Nomura report, the US Treasury yield curve is showing a bear flattening trend, with the 10-year real yield rebounding to 2.31%, while the 10-year breakeven inflation rate continues to slide to 2.23%. Expectations have heated up for the Federal Reserve to raise rates by 3 basis points at the July meeting, accumulate 14 basis points by the September meeting, and accumulate 27 basis points by the December meeting. The 2-year forward OIS rate (a proxy indicator for the terminal rate) has risen to 3.84%. **This means that the current pricing logic in the bond market is still dominated by expectations of rate hikes, rather than shifting towards bets on future rate cuts.** Based on this, Matsuzawa judges that the market's pricing of the end of the AI boom is incomplete, and investor doubts are still fermenting rather than having formed a clear consensus. ``` The above exciting content comes from Zhuifeng Trading Desk. For more detailed interpretations, including real-time analysis and frontline research, please join [**Zhuifeng Trading Desk ▪ Annual Membership**] Risk Warning and Disclaimer The market carries risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investors assume full responsibility for any investments made based on this content. ``` ### Related Stocks - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [588200.CN](https://longbridge.com/en/quote/588200.CN.md) - [159995.CN](https://longbridge.com/en/quote/159995.CN.md) - [562820.CN](https://longbridge.com/en/quote/562820.CN.md) - [159546.CN](https://longbridge.com/en/quote/159546.CN.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [IXN.US](https://longbridge.com/en/quote/IXN.US.md) - [XSW.US](https://longbridge.com/en/quote/XSW.US.md) - [IGV.US](https://longbridge.com/en/quote/IGV.US.md) - [XLK.US](https://longbridge.com/en/quote/XLK.US.md) - [159558.CN](https://longbridge.com/en/quote/159558.CN.md) - [561980.CN](https://longbridge.com/en/quote/561980.CN.md) - [USD.US](https://longbridge.com/en/quote/USD.US.md) - [SSG.US](https://longbridge.com/en/quote/SSG.US.md) - [SOXS.US](https://longbridge.com/en/quote/SOXS.US.md) - [ROM.US](https://longbridge.com/en/quote/ROM.US.md) - [TECL.US](https://longbridge.com/en/quote/TECL.US.md) - [REW.US](https://longbridge.com/en/quote/REW.US.md) - [TECS.US](https://longbridge.com/en/quote/TECS.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [NMR.US](https://longbridge.com/en/quote/NMR.US.md) - [8604.JP](https://longbridge.com/en/quote/8604.JP.md) - [.VIX.US](https://longbridge.com/en/quote/.VIX.US.md) ## Related News & Research - [SOXX Enters Bear Market: Why Ed Yardeni Says Semiconductor Stocks Could Fall Another 12%](https://longbridge.com/en/news/293182752.md) - [AI Trade’s Favorite Chip ETF Sees Record Inflows Despite Worst Month Since 2008](https://longbridge.com/en/news/293222756.md) - [ChipAgents Helps Whalechip Cut Semiconductor Root Cause Analysis from Days to Minutes](https://longbridge.com/en/news/292814206.md) - [Semiconductor stocks are on the verge of a bear market. 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