Summary

• The S&P 500 remains fundamentally strong, with rising profit margins and earnings supporting current and higher valuations.
• Recent tech and AI stock sell-offs are seen as short-term noise, not indicative of a broader market bubble.
• I see pockets of excess, notably in memory stocks, but the broad S&P 500 is modestly priced and resilient.
• I recommend buying S&P 500 dips, targeting potential upside to ~9,500 by year-end if profit trends persist.

Headlines are calling the market drop on Tuesday an “AI Wake Up Call.” Truth-be-told, AI stocks did bear the brunt of it. The Nasdaq fell ~3.7% and the S&P ~2.3% over the last five days, mostly on Tuesday.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MU, S&P 500 either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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