AI Trade Diverges: Correlation Between CapEx Spenders and Semiconductors Near Zero
The 30-day correlation between top US CapEx spenders and the semiconductor index (SOX) has dropped to near zero, the lowest in over four years, marking a sharp shift from the +0.78 peak in April. The divergence signals that investors are now treating AI infrastructure builders and chipmakers as separate trades.
The relationship between major AI infrastructure investors and semiconductor stocks is breaking down. Since early June, the 30-day rolling correlation between the largest US capital expenditure spenders and the SOX semiconductor index has fallen to nearly zero — the lowest level in at least 4.5 years.
This is a dramatic reversal from April, when the correlation stood at +0.78. For context, the average since the start of 2022 has been +0.60. The divergence arises because chipmakers continue to benefit from AI demand, while hyperscalers face growing scrutiny over whether their massive capital outlays will generate sufficient returns.
According to market commentary, the next phase of the AI trade will be defined by profitability rather than investment levels. Investors are no longer bundling infrastructure builders and chip suppliers into a single bet.
Source: The Kobeissi Letter