$6B into Hedge! Chip Stocks Retreat, Is the Bull Market Over?
A new report published by MIT’s NANDA initiative reveals a sobering reality: while generative AI holds tremendous promise for enterprises, only about 5% of pilot projects deliver rapid revenue growth. For the remaining 95%, implementation falls short — leaving little measurable impact on profits.
Affect by the report, chip stocks all pull back, leading by $NVIDIA(NVDA)$.
The study highlights a critical “learning gap.” The issue isn’t the models themselves, but rather the fact that most tools and organizations fail to adapt and learn. While tools like ChatGPT thrive with individual users thanks to their flexibility, they often stall in enterprise settings where integration into workflows is key.
Perhaps more surprisingly, MIT researchers found a misalignment in budgets. Over half of generative AI spending goes to sales and marketing tools, but the highest ROI actually comes from back-office automation — areas like eliminating outsourcing, cutting agency costs, and streamlining operations.
Goldman Sachs has warned that the period from late July through mid-September tends to be one of the most challenging windows for market returns. However, the bank also noted that the recent selloff could set the stage for fresh buying opportunities.
Adding to this cautious sentiment, investors poured $6 billion into hedging ETFs last week — the largest inflow since April — suggesting growing demand for downside protection.
Over the past five days, Mag 7 stocks $Roundhill Magnificent Seven ETF(MAGS)$ have fallen sharply, while the S&P 493 has remained largely flat.
Let’s Discuss:
Do you see this pullback as a healthy correction or the start of something bigger?
Have you set up hedges in your portfolio, or are you staying fully invested?
Most importantly — do you have dry powder ready to buy the dip if the bull market continues?
How do you view sector rotation?
👉 Bull market just starting, or already over? Share your view below!
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I have not set up hedges and am still fully invested. I have not started to buy this dip as I prefer to keep my dry powder to buy when the stocks dip further. I may be wrong as many investors have been able to keep the market propped up so far and dips hardly dip much or dip for long.
Sector rotation is normal as it reflects the economy in the various cycles. It is also a way for investors to rotate their cash around and place their money in sectors that they think will give the best returns. With the expected rate cuts and potential economic recession with the threatened tariffs, I believe many have started to rotate sectors. I think the bulk market is not over but will need time to consolidate before going higher.
I’ve taken a cautious stance with some light hedges in place, especially with Goldman Sachs flagging seasonal weakness and hedging ETFs seeing big inflows. At the same time, I’m holding dry powder to buy quality names if sentiment turns. It’s about balancing risk protection with staying ready for opportunities.
On sector rotation, I think AI-related plays may cool while industrials or back-office automation gain traction. Markets need these rotations to sustain a bull cycle. To me, this isn’t the end of the bull market — just a gear shift.
@Tiger_comments @TigerStars
高盛警告稱，7月下旬至9月中旬期間往往市場回報最具挑戰性的窗口之一。然而，該行也指出，最近的拋售可能爲新的買入機會創造條件。
The headlines "AI BUBBLE?". Is this the end? Hang on - Let's not panic.
I believe that this feels more like a sector rotation, not a reckoning. Investors are shifting from high growth tech to value defensive and inflation linked sectors like energy, materials and consumer staples.
The Bull Market isn't over, it is recalibrating. AI is here to stay and in the long run market leaders like Nvidia and Palantir will continue their exponential growth.
This is just a temporary setback and a great time to go bargain hunting.
As Warren Buffett likes to say When there is Fear in the markets it is time to be greedy.
@Tiger_comments @TigerStars @Tiger_SG @CaptainTiger @TigerClub
Hedging protects against losses while staying invested supports long-term growth and the choice depends on one's own risk and goals as hedging comes with a cost
Keeping dry powder allows buying quality stocks at lower prices during a pullback especially with belief in a continuing bull market
The chip stock pullback may signal a broader sector rotation as investors shift with the economic cycle and recognising this helps rebalance the portfolio for the next phase
The bull market seems to be shifting not ending and is poised for more upside if growth holds and interest rates ease。。。
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