I see Alphabet’s pullback as more about AI spending concerns than weak fundamentals. Q2 revenue grew 24% and Cloud jumped 82%, but with 2026 CapEx potentially reaching $205B, investors want clearer proof that these investments will translate into stronger cash flow and returns.

Meanwhile, CRWV, SMCI and LITE showed that AI infrastructure demand remains strong, with CRWV’s backlog above $100B and LITE saying laser demand far exceeds capacity. So I’m not ready to call the AI trade over, but valuations are clearly facing higher expectations.

I’ll be watching CPI and upcoming earnings closely. From here, beats alone may not be enough — orders, margins and guidance will determine who can keep rallying. I still see room for the AI trade, but the market will increasingly reward companies that can prove real returns from AI spending.