The tone of AI stock behavior has changed in important ways this spring.

Until March, they were clearly undervalued, and were quietly and somewhat patiently being accumulated by the minority of investors who realized the significance of AI. Recent buying has been less patient, occasionally mildly panicky, and indicates that awareness of AI is steadily spreading toward mainstream investors.

In a normal year, closing the Strait of Hormuz would impact the stock market much more than any other problem. But for the past few weeks AI has clearly been having a bigger impact on the market. Almost big enough for markets to forget about Hormuz. It’s weird that rising oil prices haven’t much hurt non-AI stocks.

There’s a stock market bubble currently in progress. The key question is: which stocks are unsustainably high?

I’ve been shifting my investments to more AI-focused bets.

Here’s an overview of my larger positions, in descending order of how eager I am to recommend further purchases now:

• MU – AI is memory hungry, and MU is in a good position for almost NVDA-like growth
• CSIQ – solar, for AI-related power demand
• ASML – semiconductor equipment
• SCIA – semiconductor equipment
• GOOGL – for TPUs, DeepMind, and Waymo
• SMCI – datacenter
• NVDA
• AMPX (and AMPX.WS) – batteries suitable for drones
• TSSI – datacenter
• CLS – close to half of its business involves datacenters
• PDEX – a fairly safe way to diversify my portfolio
• MTG – a fairly safe way to diversify my portfolio
• ASTS – expanding cell phone coverage; I’ll likely sell when I can get long-term gains

Short positions:

• SP500 futures – hedging against risks such as tariffs
• SOFR futures dated 2029 through 2032 – betting that interest rates will rise due to AI
• WMT – it’s got a high PE ratio, and little sign of growth

[This is not at all a complete list, as I have smaller positions in something like 150 other companies.]

AI stocks are likely to form a bubble someday, but I’m guessing the peak of that bubble is more than a year away.

I still have some concerns about tariff-related damage causing some declines sometime this year. I’m optimistic that the courts will strike down the per-country tariffs this fall. It shouldn’t take long for the country to recover from the tariff damage once the tariffs have been removed.

Beware that even in a strong bull market, there will be periodic scares, such as January’s DeepSeek-trigger panic, that cause sharp drops in leading stocks. AI-related stocks had a big rally in June, and are likely to consolidate for a while before the next such rally.