AI stocks slump 10–15%, but early-stage boom may offer decade buying chance

AI stocks have been the main driver of gains in the S&P 500 in recent years, with companies like Nvidia and Amazon generating significant revenue growth from the early stages of the AI boom. The Dan Ives Wedbush AI Revolution ETF jumped nearly 50% from its launch a year ago, and the iShares Semiconductor ETF soared more than 200% over the past three years. However, recent weeks have brought a sharp reversal as investors grow cautious, weighed down by geopolitical turmoil, inflation concerns, and skepticism about whether tech companies' enormous AI spending will deliver commensurate returns.

The article frames this moment as potentially pivotal: the boom so far has centered on infrastructure development—building and training AI models—but the real growth catalyst may come from widespread adoption and real-world use. If industries such as robotics and pharmaceuticals begin to rely heavily on AI for major advancements, and if companies use AI to gain efficiency and lower costs, then the long-term opportunity remains intact. The decline, on this reading, is a midcycle pullback in an early-stage boom, not a sign the thesis has broken. Infrastructure leaders are still trading at what the article characterizes as reasonable multiples: Nvidia at 22x forward earnings and Microsoft at 20x—levels that may reflect pessimistic expectations and leave room for revaluation if the adoption curve accelerates.