The artificial intelligence (AI) trade finally cracked. After months of resilience while utilities, real estate and consumer discretionary names took a beating, the market's favorite growth story is now the one getting sold, and investors sitting on big gains are rushing to lock them in.
The fear has a familiar shape. Earlier this year, software stocks were written off as AI roadkill, and the slide dragged on for roughly 60 days. Many of those same names have since reclaimed all-time highs, because the earnings never broke the way the headlines said they would.
