CICC said global AI-linked assets have seen a clear pullback since the middle to late part of June, according to a report cited by Jinshi. The firm said the Korean market has been hit the hardest in this round of declines.
CICC attributed the retreat to high leverage, crowded positioning, and macro factors. It also said investor concern over an AI bubble is rising, drawing a comparison to the period before the 2000 technology stock bubble burst.
In CICC’s view, market stabilization and a new round of gains would depend on several conditions: the unwinding of crowded trades and high leverage, easing expectations for Federal Reserve rate hikes, and fresh catalysts from earnings reports and industry developments.
Global AI-linked assets have posted a notable pullback since mid-to-late June, with the Korean market showing the most dramatic move, according to CICC research cited by Jinshi and carried by ChainCatcher.
CICC said the correction was mainly driven by high leverage, crowded positioning, and macro factors. The firm added that concern over an AI bubble is intensifying, in a setup it compared with the period before the 2000 technology stock bubble burst.
CICC said a market stabilization and a fresh leg higher would require the digestion of crowded trades and elevated leverage, an easing in expectations for Federal Reserve rate hikes, and new catalysts from earnings and industry developments.
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