AI Selloff May Be Driven More by Market Positioning Than Weakening AI Demand

Investors may be underestimating how much of the AI selloff is being driven by market positioning rather than actual changes to the AI infrastructure buildout.
As funds reduce exposure, leverage unwinds and options hedging can create additional selling pressure. This can turn legitimate concerns about AI spending into a broader selloff across the entire AI trade.
The disconnect is becoming increasingly visible:
- $AMD says demand continues to exceed supply and expects revenue growth of more than 80% in 2027.
- $PLTR recently reported 96% revenue growth despite not being an AI infrastructure company.
Yet both stocks are trading as though they face similar risks.