AI Fade — Health and IT Services Lead

The AI trade has been fading since 22 June. On that day the Rubin 100, our index of the companies that build AI hardware, closed at its high of 2,478.59; on Wednesday it closed at 1,638.05, 33.9% lower, and this morning Asia sold its chip makers again. If the fade runs longer, the question is where money goes instead. Our two indices outside AI hardware — HALO Growth 100 and AI Users — have already answered part of it: health care, IT services, exchanges and everyday consumer names have risen through the fade. Power, space and the fastest growers have fallen with Rubin.

AI Users — a record close on Wednesday

AI Users holds 32 companies that put AI to work in their own business, from Accenture to Walmart. Its low for the year came on 22 June at 868.88, the same day Rubin peaked. On Wednesday it closed at 1,034.79, its first close above the 6 January high of 1,019.58 that we named as the test on Tuesday. Since 22 June it has gained 19.1%.

HALO Growth 100 is broader: 100 growth companies in twelve themes, from drones to food. As a whole it is down 1.9% since 22 June, because it holds both sides of the trade. Split by theme, it shows the same picture as AI Users. The health and consumer themes rose, while the themes tied to power, defense and space fell with the chip makers.