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@KobeissiLetter That’s a major shift. AI stocks are clearly carving out their own path from the broader market.

@KobeissiLetter PENTUSHI BOUGHT SO THIS IS EXPECTED

@KobeissiLetter That’s a pretty wild rotation. AI isn’t just outperforming anymore, it’s starting to trade like its own little market.

@KobeissiLetter 🔼 This is the turning point

@KobeissiLetter So AI stocks are now the market’s opposite day, guess they finally got the memo that being contrarian pays off. x.com/orsinivanessa3/status/20…

@KobeissiLetter What does the correlation distribution across individual AI names look like beneath this index level reading?

@KobeissiLetter when one basket funds the other you don't get diversification, you get correlation risk that shows up exactly when you need it not to

@KobeissiLetter Capital concentration into semis means the rest of the index has to starve

@KobeissiLetter It is a bit concerning. Be sure to have some dry powder ready for a serious pullback.

@KobeissiLetter The negative correlation shows how concentrated the liquidity is getting

@KobeissiLetter AI stocks have officially become their own weather system. The rest of the market gets a forecast, they get an evacuation map.

Worth flagging: this isn't just one shop's read. Goldman's own AI basket shows the same thing - correlation to the broader S&P 500 has also flipped negative, a record low, using a completely different methodology. Two independent measurements landing on the same signal is the real story: "the market" is increasingly two markets sharing one index. If your diversification is by ticker count and not by AI-exposure, you're carrying more concentration risk than the number of names in your portfolio suggests.

A -0.60 correlation is a powerful signal of market segmentation, not necessarily a verdict on AI’s long-term prospects. When performance becomes this concentrated, liquidity, positioning and expectations can matter more than fundamentals in the short run. The key question is whether capital is rotating towards genuine earnings growth or simply chasing recent winners. Either way, concentration risk deserves as much attention as headline returns. 📊⚖️ Please read my latest X: x.com/tekkaus/status/209223961…

@KobeissiLetter yeah this negative correlation really shows how crowded the AI trade is getting tbh

@KobeissiLetter Negative correlation means AI outperformance now draws capital directly from ex-AI names rather than expanding total market liquidity.

@KobeissiLetter Splitting up. Finally.

@KobeissiLetter How long can this divergence continue before valuations, earnings or liquidity force the two trades back together?

@KobeissiLetter Here is a look at the correlation delta on $NVDA less the average for $DJIA names over the past 100 days - definitely a shift x.com/thebankersdozen/status/2…

This is the dispersion trade in full force. When the AI vs non-AI correlation goes negative, single-name options flow tells the real story before the index does. We're seeing capital rotate on a daily basis, not a monthly one. The risk is if that -0.60 correlation snaps back fast, both sides unwind at once and volatility spikes across the board. Watching the gamma positioning here closely.

-0.60 on a 40-day correlation means AI and non-AI aren’t just moving differently; they’re actively offsetting each other. Since late-June, trimming the crowded AI winners has become the other side of buying what got left behind. For index investors, the S&P can look calm while the fight underneath is anything but.

@KobeissiLetter In the AI era, workers all over the world—especially knowledge workers—must immediately abandon the fatal illusion that “politics has nothing to do with me and I can enjoy peace and quiet”!👇x.com/catoliang/status/2092205…

@KobeissiLetter @grok Compare this correlation to NASDAQ100 (QQQ).

@KobeissiLetter The personal saving rate is a residual, not a behavior. It is disposable income minus outlays, and that income excludes realized capital gains. Sell appreciated stock, spend the proceeds, and the accounts see consumption and no income. Two years of gains do this alone.

@KobeissiLetter DOMESTIC AI SECTOR IS BANKRUPT And $NVDA cannot sell to the only market that is solvent: China - because of Trump’s stupid trade war. AI is Infra and #China has it. US spent $15.4TRN on Israel’s wars instead of infra. The US cannot roll out AI! x.com/reasonus4/status/2092437…

@KobeissiLetter Negative correlation means AI is becoming its own factor rather than market beta. That raises diversification value, but also concentration risk: index direction can hide different earnings and valuation regimes.

@KobeissiLetter May gold drop 💧 x.com/XAUProOperator/status/20…

@KobeissiLetter money isn't leaving the market. it's just switching seats

@KobeissiLetter a -0.60 rolling correlation means AI is now functioning as a sector-sized hedge against its own economy, which is the kind of thing that sounds like a feature until it isn't.

@KobeissiLetter Historic AI capex not convincing the market to be profitable

@KobeissiLetter AI stocks are becoming their own market, increasingly detached from everything else

@KobeissiLetter Deeply negative correlation after a massive AI surge is classic late cycle behavior. Capital rotation is the real story.

@KobeissiLetter x.com/moretradingonl/status/20…

@KobeissiLetter @grok which category is the most outperforming than AI stocks, gives names of the highest growing stocks.

@KobeissiLetter Correlation breakdown, not just a slowdown. A -0.60 40-day correlation between AI and non-AI equities is the most negative on record, only the 2nd such reading since 2024. This isn't broad risk-off

@KobeissiLetter that -0.60 reads like exhaustion, not rotation. july 2024 did the same thing and ai names dropped ~20% in six weeks while spx chopped. crowded longs decoupling before liquidation. what happens if nvda breaks the june low?

@KobeissiLetter Adding 40 day index correlation to my list of high potential parameters to use when establishing the trading rules of my AI agent 🔥 ✍️

Worth looking under the price divergence: across NVDA, MSFT, GOOGL, META, and AVGO, capital allocation quality doesn't show a debt-fueled buildout. MSFT, GOOGL, META, and AVGO have been consistently self-funded from operations across their full available history. NVDA is the more interesting case — an ordinary growth-financed profile in 2021-2022, a dip into financing-dependence in 2023 during its steepest buildout year, and a full recovery to self-funded and stable every year since. The price move may be decoupling from the broader market; the underlying capital structure isn't telling a story of leverage propping it up.

This is actually pretty interesting. A -0.60 correlation doesn’t just say “AI is doing its own thing” — it suggests the market may be actively rotating between AI and everything else. If that keeps up, broad index performance could hide a lot more dispersion under the surface. Feels like stock selection matters a lot more in that kind of tape.

@KobeissiLetter AI is no longer moving with the broader market. A -0.60 correlation signals a major rotation beneath the surface. AI remains strong, but market leadership is becoming increasingly fragmented. #AI #Markets #MacroDelta

@KobeissiLetter That divergence is the key signal 👀 AI isn’t just leading the market anymore—it’s increasingly trading like its own asset class.

@KobeissiLetter I guess the bubble hasn't shown any signs of popping anytime soon

@KobeissiLetter You all know what comes next

@KobeissiLetter So there's the stock market, and then there's whatever AI is doing off in the corner by itself. My 401k is somehow trying to date both. x.com/VitalyGod/status/2092472…

@KobeissiLetter Nvidia is about 10 percent off its record and the index is barely down. A year ago that split would have been unthinkable.

@KobeissiLetter AI is becoming its own market.

@KobeissiLetter When market leaders go done first, you know what will happen to the rest of the market..

@KobeissiLetter That's because AI related stocks were zooming up while others sectors lagged x.com/a_gangrade/status/205462…

@KobeissiLetter That’s a pretty clear sign the AI trade is becoming its own market story, not just another leg of the broader rally.

@KobeissiLetter This is what happens when a theme stops being a "trade" and becomes an asset class. Semis, hyperscalers, and software-AI plays are starting to trade on their own fundamentals, not on SPX beta.

@KobeissiLetter AI is developing independent market dynamics.