Winter is coming.

The first three quarters of 2026 have been truly insane for the markets. But it's fair to say that the AI trade has cooled off a bit in recent months.

So yes, the days are getting colder and shorter. Winter is coming. But is it coming for the AI trade?

Well...other than the Leopold deleveraging in July, macro has acted as a major overhang on what would otherwise be an earnings-driven bull market.

Despite September's institutional flows into Tech keeping the market elevated like Wingardium Leviosa (any Harry Potter fans here? 🧙‍♂️), we're yet to see any huge risk be added even with institutional leverage rebounding close to 2026-average levels.

(Slight breakaway - that metric is one I will monitor closely to see if we get to July levels again)

I therefore continue to believe that there's substatial headroom for the AI trade to continue as we head into earnings.

However, investors are largely waiting for major macro hurdles to pass - specifically oil and rates, with the 10Y at multi-decade highs.

All of this matters, and is why I personally choose to ignore investors that say "macro doesn't matter" when it has dictated the course of financial markets since the dawn of time. (Quick rant over)

The most recent payrolls data definitely gave some ease to Fed hike odds, but we're not past hiking-territory yet with rates still skyhigh and CPI coming up soon.

All of this leaves a ton of lingering uncertainty that wasn't there earlier in the year even at the height of the Iran war just as the AI trade and earnings growth lit the initial fire under the market.

However, we're coming into earnings season now with many AI-related stocks (semis, semicaps etc) currently mispriced imo.

Since there's clearly underlying demand for tech stocks (see my previous flow posts)...I wonder if we'll start to see some re-ratings occur as a front-run into earnings.

Or...if the macro landscape is still a bit too treacherous.

I keep my prediction that we'll see an AI bull market heading into 2027.

Time will tell.