A new rotation is showing up under the surface of AI stocks as capital moves out of pure momentum names and into the next layer of perceived beneficiaries
Names like Reddit, Snowflake, and other “AI-adjacent” platforms are getting attention again as traders look for lagging catch-up trades after the first Nvidia-driven wave
The first leg of AI was chips and infrastructure
Now the market is trying to price the software layer and data layer as a second trade, not just a continuation of the first
The problem is timing
When everyone spots the “second wave” at the same time, it stops being rotation and starts becoming overcrowding again
This is how the AI trade keeps resetting itself rather than expanding cleanly