Updated

Growing fears that the AI trade may be overheating are surfacing at a particularly troubling time for equities, with commentators warning that Wall Street's 'biggest bubble' may be bursting. The Cboe Volatility Index jumped to 18 on Monday, reflecting rising investor anxiety. Chip stocks, long viewed as a relatively safe way to play the AI boom, have become what analysts now describe as the market's 'pain trade.' Even though a slowdown in the pace of AI development would not necessarily curb overall spending, investors are becoming more cautious toward semiconductor names for other reasons, including valuation concerns and shifting capital flows, marking a notable shift in sentiment toward a previously favored corner of the AI trade.