Paradis Labs says the easy-money phase in AI stocks has ended after a broad re-rating of the AI semiconductor supply chain in the first half of 2026. The research note argues that July’s deleveraging wave marked a turning point, with institutional investors trimming U.S. and European AI small caps and moving into defensive sectors such as financials and healthcare. Instead of buying the whole AI chain, the firm now favors large companies that embed AI deeply into their core businesses. The article says the first-half rally was driven more by sentiment and valuation repair than by a material improvement in fundamentals. Paradis Labs adds that, without fresh catalysts, another move of the same scale looks difficult, especially with the macro backdrop still unstable. It also says investors should shift from sector calls to stock selection. Paradis Labs highlights companies with durable moats, strong cash conversion, and better operating efficiency. Once AI spending translates into margin expansion, it expects the market to re-rate those businesses. Uber, Netflix and Meta are named as examples under that framework. The note also recommends concentrating technology exposure in quality names while diversifying some risk into non-cyclical sectors outside tech.