Wall Street expert David Woo, a former Bank of America strategist, expresses skepticism about the current AI stock trade, noting it is losing momentum. He is betting against the Nasdaq 100, which has not gained ground since October, and points out that the "Magnificent 7" stocks now trade below their 100-day moving averages. Woo suggests that increased AI spending by hyperscaler companies is no longer viewed as a positive indicator for future returns, potentially signaling a deeper downturn in tech stocks. However, Dale Smothersdale, CEO of RDS Wealth, views the recent sell-off in AI-related tech stocks as an "overreaction," advising investors not to be overly concerned by current market jitters.
In a significant move, Texas Pacific Land Corporation (TPL) announced a US$50 million investment and water rights provision for large AI-linked data centers in West Texas, partnering with Bolt Data & Energy. This venture, co-founded by Eric Schmidt, marks a strategic shift beyond TPL's traditional oil and gas business, causing its stock to jump 18.1% on the news and 44% year-to-date. Meanwhile, India's enterprise AI firm Fractal Analytics saw its shares drop 5% on its trading debut, valuing the company at $1.63 billion, below its IPO price of 900 rupees, partly due to fears of AI disrupting traditional software companies.
Anthropic, the developer of the Claude chatbot, secured a massive $30 billion in Series G funding, led by GIC and Coatue. This investment values the company at $380 billion, making it the largest venture deal of 2026 and boosting its total funding since 2021 to nearly $64 billion. Anthropic, now the second-most valuable generative AI startup with over $14 billion in revenue primarily from enterprise clients, plans to use these funds for advanced AI research, product development, and expanding its infrastructure across major cloud platforms.
For investors considering AI stocks, Nvidia and AMD appear more attractive than Palantir due to Palantir's high valuation. Nvidia's upcoming Rubin platform, expected in late 2026, promises significantly lower inference costs and improved training for AI models compared to its Blackwell GPUs. Advanced Micro Devices (AMD) is also a strong contender with its Instinct MI400 chips, which could rival Nvidia's Vera Rubin chips, as AI hyperscalers seek to diversify their reliance away from a single provider.
Several companies are successfully integrating AI into their core operations. Intuitive Surgical, a leader in robotic surgery, utilizes AI to analyze data from millions of procedures performed by its 11,000 da Vinci systems worldwide, enhancing system performance. Its Ion system now employs AI for real-time correction during lung biopsies. Similarly, Intuit Inc. (INTU) leverages AI to offer "done-for-you" solutions, contributing to an 18% increase in revenue and a 126% rise in net income in the first quarter of 2026, expanding its services to small businesses and consumers. Bernstein also identified eight European stocks, including EasyJet and Zurich Airport, that are resilient to AI risks, using AI for efficiency or having business models not threatened by AI, with Merlin Properties even benefiting by becoming a major data center owner-operator.
Key Takeaways
- David Woo, a Wall Street expert, is betting against the Nasdaq 100, citing a loss of momentum in the AI stock trade and the "Magnificent 7" stocks falling below their 100-day moving averages.
- Texas Pacific Land Corporation (TPL) is investing US$50 million and providing water rights for AI-linked data centers in West Texas, causing its stock to rise 18.1% and 44% year-to-date.
- Anthropic, maker of the Claude chatbot, secured $30 billion in Series G funding, valuing the company at $380 billion and making it the largest venture deal of 2026.
- Nvidia's upcoming Rubin platform (late 2026) and AMD's Instinct MI400 chips are positioned to offer advanced AI processing, potentially rivaling each other and providing alternatives for hyperscalers.
- Intuitive Surgical integrates AI into its da Vinci robotic surgery systems and Ion lung biopsy system, using it for data analysis and real-time corrections.
- Intuit Inc. (INTU) is rated a Buy due to its strong AI integration, which drives "done-for-you" solutions and contributed to an 18% revenue increase and 126% net income rise in Q1 2026.
- Fractal Analytics, an Indian enterprise AI firm, saw its shares drop 5% on its trading debut, valuing the company at $1.63 billion, below its IPO price, amidst fears of AI disrupting traditional software.
- Bernstein identified eight European stocks, such as EasyJet and Merlin Properties, as resilient to AI risks, either by using AI for efficiency or having business models not threatened by AI.
- RDS Wealth CEO Dale Smothersdale considers the recent sell-off in AI-related tech stocks an "overreaction."
- Nvidia and AMD are suggested as more attractive AI stock options over Palantir due to Palantir's high valuation.
Wall Street Expert David Woo Bets Against Nasdaq 100
David Woo, a Wall Street expert and former Bank of America strategist, believes the AI stock trade is losing momentum. He is betting against the Nasdaq 100, noting it has not gained ground since October. Woo highlights that the "Magnificent 7" stocks are now below their 100-day moving averages. He also observes that hyperscaler companies' increased AI spending is no longer seen as a positive sign for future returns. Woo suggests this shift could signal a much deeper downturn in tech stocks.
David Woo Bets Against Nasdaq 100 as AI Trade Stalls
David Woo, a former Bank of America strategist, believes the AI stock trade is losing momentum. He is betting against the Nasdaq 100, noting it has not gained ground since October. Woo highlights that the "Magnificent 7" stocks are now below their 100-day moving averages. He also observes that hyperscaler companies' increased AI spending is no longer seen as a positive sign for returns. Woo suggests this shift could signal a deeper tech market downturn.
Texas Pacific Land Stock Soars with AI Data Center Move
Texas Pacific Land Corporation (TPL) stock rose 18.1% after announcing a new venture. The company will invest US$50 million and provide water rights to build large AI-linked data centers in West Texas. This partnership with Bolt Data & Energy, co-founded by Eric Schmidt, shifts TPL beyond its traditional oil and gas business. The move has already caused TPL's share price to jump 44% this year. TPL aims for $895.3 million in revenue and $610.3 million in earnings by 2028 from these new ventures.
Fractal Analytics Stock Falls on India Trading Debut
India's Fractal Analytics saw its shares drop 5% on its first day of trading on February 16, 2026. The company, founded in 2000, is an enterprise AI firm serving Fortune 500 companies. Its shares traded at 861.25 rupees, valuing the company at $1.63 billion, which is below its IPO price of 900 rupees. An expert from Waterfield Advisors noted that fears of AI disrupting traditional software companies contributed to the decline. Fractal's $314 million IPO was fully subscribed only on its final day.
Consider Nvidia and AMD Over Palantir for AI Stocks
While Palantir has a strong product, its stock valuation is very high. Nvidia, with a lower valuation, is expected to grow significantly with its upcoming Rubin platform in late 2026. The Rubin platform will offer much lower inference costs and better training for AI models than Blackwell GPUs. Advanced Micro Devices (AMD) is also a strong contender with its Instinct MI400 chips, which could rival Nvidia's Vera Rubin chips. AI hyperscalers may prefer not to rely solely on Nvidia, creating opportunities for AMD.
Intuitive Surgical is a Top AI Healthcare Stock
Intuitive Surgical is a leading company in robotic surgery, known for its da Vinci systems. Over 11,000 da Vinci systems are used worldwide, performing more than 16 million procedures. The company also offers the Ion system for robotic lung biopsies and is growing by getting approval for more procedures. Intuitive Surgical uses AI to analyze data from millions of procedures, improving its systems. The Ion system now uses AI for real-time correction during lung biopsies, addressing a key challenge.
Intuit Stock a Buy Due to Strong AI Integration
Intuit Inc. (INTU) is rated a Buy because of its strong business and excellent use of AI. The company uses AI to offer "done-for-you" solutions, which helps keep customers and allows for better pricing. In the first quarter of 2026, Intuit saw an 18% increase in revenue and a 126% rise in net income. AI adoption is helping Intuit expand its services and sell more to both small businesses and consumers. Despite some risks like government competition and Mailchimp's performance, Intuit's strong position makes it a good investment.
Bernstein Names 8 European Stocks Resilient to AI Risks
Bernstein identified eight European stocks that can withstand the current "AI scare trade" in markets. These companies have strong business models that protect them from AI-driven changes. Examples include budget airline EasyJet and Zurich Airport, which use AI for efficiency rather than facing disruption. Construction firm Royal BAM Groep and game publisher Asmodee also have core businesses not threatened by AI. Merlin Properties, a real estate trust, is even benefiting by becoming a major data center owner-operator.
Anthropic Raises $30 Billion to Boost AI Products
Anthropic, the maker of the Claude chatbot, secured $30 billion in Series G funding. This investment, led by GIC and Coatue, values the company at $380 billion and is the largest venture deal of 2026. Anthropic's total funding since 2021 is now nearly $64 billion, making it the second-most valuable generative AI startup. The company's revenue now exceeds $14 billion, mostly from enterprise customers, including eight of the Fortune 10. The new funds will support advanced AI research, product development, and expanding its infrastructure across major cloud platforms.
RDS Wealth CEO Calls AI Stock Sell-off Overreaction
Dale Smothersdale, CEO of RDS Wealth, stated that the recent sell-off in AI-related tech stocks is an "overreaction." He discussed the market's current nervousness about AI on the "Making Money" show. Smothersdale offered his perspective on why investors should not be overly concerned by the current market jitters. He also provided guidance on how investors should handle midterm years in the market.
Sources
- 'The AI Trade Is Stalling:' Why This Wall Street Expert Is Betting Against The Nasdaq 100
- 'The AI Trade Is Stalling:' Why David Woo Is Betting Against The Nasdaq 100 - Amazon.com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL)
- Texas Pacific Land (TPL) Is Up 18.1% After Pivoting Into AI-Linked West Texas Data Centers
- India's Fractal Analytics drops 5% in trading debut, valued at $1.6 billion
- Should You Forget Palantir and Buy 2 Other Artificial Intelligence (AI) Stocks Right Now?
- My 1 Top AI Healthcare Stock to Buy and Hold Forever
- Intuit: Investors Fear AI, But AI Is Exactly What Makes It A Buy
- The AI ‘scare trade’ is tearing through markets. Bernstein picked 8 stocks that can weather the storm
- Anthropic Secures $30B Series G to Expand AI Products
- AI sell-off is an 'overreaction,' CEO explains why
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