Goldman Sachs Analyst Warns AI Trade Is Stalling

Shawn Tuteja, who manages ETF and custom baskets volatility trading at Goldman Sachs, reports that the AI trade is stalling. He observes that investors have stopped treating the artificial intelligence sector as a single block, which has led to a market that largely fails to reward positive earnings surprises.

This trend persists despite a second-quarter earnings season that featured one of the strongest beat rates on record. Tuteja anticipates that the S&P 500 will remain range-bound in the near term. He warns that a zone of complacency may develop as the market approaches the September Federal Open Market Committee meeting.

Following the adjustment of market positioning after late-July lows and a decrease in implied volatility, Tuteja suggests that investors adopt a more selective approach to AI investments rather than broad sector bets.