WS #17030
Despite a technical rebound in Nvidia and AMD, the fundamental thesis for AI growth is fracturing. Ramp data shows enterprise AI spending has flatlined, and major tech-focused hedge funds like Tiger Global and Whale Rock suffered double-digit percentage losses in October. This divergence suggests the current chip rally is a short-covering bounce rather than a fundamental recovery, as the market grapples with the reality that high valuations are not being supported by proportional spending growth.
AI Spending Slowdown vs Chip Rally
Despite a technical rebound in Nvidia and AMD, the fundamental thesis for AI growth is fracturing. Ramp data shows enterprise AI spending has flatlined, and major tech-focused hedge funds like Tiger Global and Whale Rock suffered double-digit percentage losses in October. This divergence suggests the current chip rally is a short-covering bounce rather than a fundamental recovery, as the market grapples with the reality that high valuations are not being supported by proportional spending growth.