Wolfe Research analysts argue the recent turbulence in artificial intelligence-linked equities reflects a recalibration rather than a structural shift in the AI trade. Analyst Stephanie Roth noted in a client note that sector leadership has "rotated rather than collapsed," with the repricing of AI-related risk potentially moving "further than the current economic backdrop warrants."

Roth emphasized that the long-term AI adoption cycle remains in early stages, particularly among larger companies where usage is "approaching 35%" according to Census Bureau survey data. The firm expects economic growth to surprise to the upside, with bond yields rising again in coming months to support cyclical stocks before AI-driven leadership "reasserts itself."

Despite recent weakness, hyperscalers remain up 164% since ChatGPT's launch compared with 78% for the S&P 500, while software stocks lag at 55%. Wolfe Research estimates domestic AI investment at roughly 1.8% of GDP in 2026, "meaningful, but far from the primary driver of the economy." The firm's proprietary index is already turning higher, suggesting improving economic momentum that could benefit AI-related investments as the rotation cycle completes.