AI Bubble Hype? Credit Says No

AI euphoria

Impossible to trade this chart, but having some low delta puts just in case looks "healthy".

Source: BofA

 

Bit extended

The AI bull is as strong as ever, but note we are hitting the upper trend line that has been in place since the summer of 2023. RSI is also very overbought.

Source: LSEG Workspace

 

QQQ downside

Downside skew in tech remains well bid. The crowd is long and in need of downside protection, hence the bid in skew.

Source: Bloomberg

 

AI benefits

Lagging the dot.com era tech benefits.

Source: BofA

 

Off the charts

"Hyperscaler capex as % of cash flow up from 35% in ’23 to 72%". Bit bubbly, or?

Source: BofA

 

Not so bubbly

Credit knows? Tech sector credit spreads close to their tightest since 1997.

Source: BofA