Will a recession kill AI stocks?

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

Is Trump planning for 100 years?
Recession or buy the dip?
Who would you buy first?

If that’s enough to get the pirates sailing, read on…

AI Collision 💥

This from President Donald Trump over the weekend in an interview with Fox News.

Fox News host:

“…are you expecting a recession this year?”

Trump:

“I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us.

“What I have to do is build a strong country. You can’t really watch the stock market. If you look at China they have a 100 years perspective, we have a quarter, we go by quarters. And you can’t go by that you have to do what’s right.“

The quip about China is significant.

Significant because he’s right. China and Russia (for that matter) have focused on the long game for a long time. It’s paid off big time as they’ve both become major disruptors to the entrenched “Western” way of conducting trade… and warfare.

The fact Trump has openly recognised this also says to me that he’s prepared to set long-term plans in place early. This is so he gets at least some form of recognition for them to play out over the next four years.

That means short-term pain, long-term gain. At least that’s the theory when you’re trying to turn the largest ship in the global economic shipping channel.

Hopefully he doesn’t create an “Ever Given moment” with the economy and lead it into a long, drawn-out recession.

However, while there is an increasing number of experts calling a recession in the US, the UK and the global economic canal, the question remains: should you play into the idea of a recession or should you be looking at all this chaos as a buying opportunity?

Let me help out with that decision making…

The Nasdaq Composite hit a high of 20,100 around three weeks ago.

It hit a low of 17,980 on Friday.

A 10% swing lower for the Nasdaq Composite is volatile in just a three-week period. Look at some of its biggest constituents’ monthly returns:

Amazon down 13%
Meta down 12%
Nvidia down 13%

That equates to around $1 trillion in decreased market cap between those three alone. It also puts a company like Nvidia closer to $110 and increases the fears the AI boom is turning into a bust.

Add to this Trump’s newfound 100 years strategy (OK, maybe not that long) and the short trade spat with China (it’s not the first time he’s been in this position with China) and it’s ripping through tech stocks no end.

However, like I say, “trade wars” aren’t isolated to now. Nor just this presidency from Trump. The last time Trump kicked off a trade war with Chiiiiina, we ended up with the market ripping through to all-time highs.

In fact, since Trump started trade wars with China in 2018, the Nasdaq Composite is up around 150%…

Amazon is up 250%…
Meta is up 257%…
And Nvidia is up 2,225%.

If you ask me, I’ll have these trade wars please and I’ll invest for the next seven years and reap the rewards as they come due.

Of course, history is no guarantee of the same outcome happening again. The world is very different to 2018… right?

It’s worth noting that I don’t think it is all that different to 2018. If you’re looking at a company like Nvidia, consider this too.

By the end of 2026 it’s expected that OpenAI and Oracle will deploy 64,000 Nvidia GB200s at the Stargate datacentre in Abilene, Texas.

The expected pricing of the GB200s is around $70,000 for one. So, yes, that’s roughly $4.5 billion worth of GB200s, just for that one data centre, for that phase of buildout.

This off the back of Nvidia posting record-breaking data centre revenues for the fiscal year ending January 2025, just a lazy 142% increase from the year prior.

Look, I won’t lie. Volatility is definitely the word of the month, maybe this year. But there’s no way this isn’t a long-term buying opportunity in my eyes.

Everything I see and read within the industry tells me we’re going to see increases in demand and revenues in key players building out the next wave of AI infrastructure.

I just reeled off three of them. I’d have those right smack bang at the top of any watchlist or consideration list when you’re thinking to yourself, “Hmmm, what should I buy next?”

And that’s just the start.

Yes, their prices may head lower short term, which is why I think a dollar-cost average strategy in a market like this is the only way to play it. But to be out or sell out of it completely? Not for me.

These dips mean long-term buying, keeping in mind a seven to ten years’ timeframe (minimum) as we step into a whole new wave of technology and infrastructure at a scale that’s frankly hard to fathom.

A Whole New Way to Play AI in 2025

35 minutes from Oxford, behind military-grade surveillance and armed guard, is a development that could remap our economy. It’s predicted it could add as much as £400 billion by 2030. This is one of the biggest financial opportunities I’ve ever seen… in any market… in any asset… and in any sector.

Click here for the details…

Capital at risk

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

man in black suit jacket and black pants figurine

Boom 📈

IBM (NYSE:IBM) up 3%
Qualcomm (NASDAQ:QCOM) up 3%
Alphabet (NASDAQ:GOOG) up 2%

Bust 📉

Vertiv (NYSE:VRT) down 10%
Tesla (NASDAQ:TSLA) down 10%
Nvidia (NASDAQ:NVDA) down 10%

From the hive mind 🧠

The UK government’s approach to AI is always interesting. There is a chance to really become a world leader, but it depends on how the UK builds frameworks and support for the industry. This maybe suggests the government is heading in the right direction at least?
If you’re a mega giant tech company and you don’t have your own AI model these days, then do you even really AI properly?
It will be China, won’t it? You know, that one country that ends up ruining AI for us all. And probably humanity while it’s at it…