The structural thesis is intact: compute, memory, networking, and power demand are still compounding. But secular winners can still fall 20-40% when valuation, rates, power delays, ROI scrutiny, and technical deterioration line up at the same time. This is a playbook for the air pocket.

June 4, 2026. Broadcom did not break the AI trade. It exposed the entry problem.

On that day, Broadcom sold off more than 14% after a print that was not catastrophic. Revenue was not collapsing. AI demand was not disappearing. The stock fell because expectations had moved beyond strong and into perfect. Analysts described it precisely: very high expectations meeting a market that wanted immaculate execution. The business was fine. The multiple was not.

That setup is not unique to Broadcom. It is the condition of high-beta AI infrastructure as a category.

The structural demand for compute, memory, networking, power, and bandwidth is as real today as it was when we started tracking the Bottleneck Migration eighteen months ago. But secular themes produce violent corrections along the way. Right now, five compounding forces are converging into the most instructive risk/reward setup since December 2022.

This issue is not a call to abandon AI. It is a playbook for the air pocket: what to hold, what to wait on, and where the bottleneck is least crowded.

 THE FIVE FORCES BUILDING AGAINST HIGH-BETA AI RIGHT NOW

 1. The Valuation Trap — Priced for Perfection in an Imperfect Market

 AI hardware names are trading at multiples that assume insatiable, uninterrupted demand. AVGO, MRVL, CRDO, and the rest aren't just pricing in strong growth — they're pricing in perfect execution of the most ambitious capital deployment cycle in the history of enterprise technology.

 Broadcom's June 4 selloff is the data point. Not a miss. Not a warning. Just a print that wasn't exciting enough. That is how fragile the setup is. When companies need to beat whisper numbers just to hold their stock price, the risk/reward has inverted. Dan Niles has modeled 30–50% downside in leading AI names by early 2027. He's not a perma-bear. He's reading the same earnings transcripts you are.

 2. The Power Bottleneck — The Constraint Nobody Priced In

 We've been tracking the Bottleneck Migration since compute was the binding constraint. It moved to memory. Then to networking. Now it has arrived at the hardest wall of all: power delivery.

Hyperscale data centers can be built in 18 to 24 months. High-voltage transmission upgrades take 7 to 10 years. New generation can sit 4 to 5 years in interconnection queues. These are not projections — they are structural timelines documented in public grid research. The buildings go up. The electrons don't arrive on schedule.

 If half the planned 2026 AI infrastructure projects slip by 12 to 18 months on power access alone, the revenue ramp for optics, custom ASICs, and networking silicon compresses. And with it, the multiple.

 3. Liquidity Tightening — The Invisible Hand Slapping Growth Stocks

 Kevin Warsh became Fed Chair with a clear framework: long-term bullish on AI-driven disinflation, short-term hawkish on everything else. His first FOMC meeting — June 16–17, 2026 — was the market's first real read on his policy posture.

The market risk is not that Warsh hikes immediately. The risk is that he removes the easing bias, keeps balance-sheet normalization in place, and gives high-multiple investors no policy relief. Meanwhile, CPI is running at 4.2% year-over-year with core sticky at 2.9%. Oil has spiked on Iran-related friction. This is exactly the environment in which long-duration growth stocks face the steepest multiple compression.

 4. The ROI Reckoning — Wall Street Will Demand Proof

We are entering the phase of the AI cycle where narrative gives way to numbers. Hyperscalers have spent. Now the market wants to see the return.

If enterprise AI adoption stalls — token costs remain too high, killer applications don't materialize on schedule, CFOs start questioning GPU cluster utilization — the capex story inverts from 'demand is insatiable' to 'we overbought.' Vanguard and Panmure Gordon have modeled tech hardware drawdowns of 35-plus percent in a capex-digestion scenario, with broader S&P damage in the 15–30% range.

The trigger doesn't need to be catastrophic. It just needs to be not exciting enough.

 5. Technical Deterioration — The Tape Is Already Talking

 For those who track price-and-volume behavior, the signals are accumulating. Broadcom's gap-down on non-catastrophic guidance is a classic distribution signal. Failed pocket pivots on high-beta AI names. Distribution days clustering after record highs. Early rotation out of mega-cap AI into energy and value.

 The setup is no longer theoretical.

 POSITIONED TO WIN: HOLD THROUGH THE VOLATILITY

Not all AI exposure is equally vulnerable. Companies with diversified revenue, hard-asset moats, or direct power infrastructure leverage will hold better — and recover faster. Two buckets to hold:

POSITIONED TO WIN: BUY THE AIR POCKET

The least crowded entries in the AI buildout are the ones the market has not yet re-rated as AI plays. Power delivery is the current binding constraint — and the most supply-constrained, demand-certain trade in the ecosystem:

PRESSURE POINTS — WHERE THE TRADE GETS UGLY

 CREDIBILITY FIREWALL

 BEAR CASE SPOTLIGHT

 WHAT WOULD MAKE THIS WRONG

 FIVE THINGS TO KNOW

 1.       The AI thesis is intact. The entry problem is not. Broadcom's June 4 selloff was not a broken business — it was a broken multiple. That condition is category-wide in high-beta AI hardware. The setup is no longer theoretical.

2.      The power bottleneck is the most actionable and least crowded thesis in the AI ecosystem right now. Grid hardware and EPC names — ETN, HUBB, GEV, NVT, PWR, and others — sit at the intersection of a multi-year backlog and an uncrowded tape. The bottleneck has migrated here. Follow it.

3.      June 16–17 is a live risk event. The market risk is not an immediate hike. It is removal of easing bias with no policy relief for high-multiple investors. Policy relief is unlikely before the data cools. Watch Warsh's language, not just the rate decision.

4.      Diversification within AI hardware is now a material risk management variable. AVGO's revenue spread gives it cover that MRVL does not have. ANET has less ASIC concentration risk than Coherent. In a re-rating environment, that difference can mean 15 to 20 percentage points of relative performance.

5.      The next opportunity is not to abandon AI — it is to let the crowded names reprice and own the uncrowded bottleneck in the meantime. When the air pocket opens on MRVL, CRDO, COHR, and LITE, that is the next entry. Until then: own the constraint, keep powder dry, let the tape show you the floor.

Many of today’s data centers are still using copper wiring. The same metal we’ve been using for a hundred years.

At the speeds AI demands with data moving between thousands of GPUs, billions of times a second, copper doesn’t just slow down.

It turns that data into heat. The more you push through it, the worse it gets. There’s no software for fix for that.

So what’s the answer?

Explore the Photonics Layer…..

The news. Two things matter. First, a Korean report says SK Hynix may slow the conversion of some HBM3E lines to HBM4 and keep more capacity in conventional DRAM. The article cites two explanations: ordinary DRAM is currently more profitable, and Nvidia Rubin production forecasts may be moving lower. The first is economics. The second would be a demand signal—but neither SK Hynix nor Nvidia has confirmed it. Micron gives us the cleaner test tonight. Management guided to roughly 81% gross margin and $19.15 of adjusted EPS, about ten times last year’s number, while meaningful new Micron capacity is not expected until the second half of 2027. At roughly 10 times forward earnings, the market is still pricing a cycle. Tonight’s guidance will tell us whether that discount is prudent or stale. The other real story is energy: according to the WSJ, FactSet’s combined free-cash-flow forecasts for Exxon, Chevron, ConocoPhillips, Valero and Marathon have risen by $78 billion across this year and next—a 53% increase—yet the U.S. energy sector remains below its prewar level and is worth only half of Nvidia.

The noise. “The AI bubble is bursting” is too broad. Tuesday’s cap-weighted S&P 500 fell 1.4%, but the equal-weight index lost only 0.37% and the Dow was nearly flat. The damage was concentrated in the companies that had carried the market. Korea is the extreme version: Samsung and SK Hynix represent more than half the KOSPI, leverage amplified Tuesday’s 10% plunge, and the index rebounded 3.3% Wednesday while remaining up roughly 100% this year. That does not make the SK Hynix report irrelevant. It means the production signal is news; treating every semiconductor as the same trade is noise. The same distinction applies to oil. Brent near $76 reflects a faster-normalization bet, but the IMO is only now assigning phased exits to ships carrying roughly 11,000 seafarers, the regular traffic scheme remains unsafe, and floating mines remain. Lower oil is the trade. “Hormuz is fixed” is the story.

When capital chases a tech theme, it tends to pile into the most obvious
layer and miss the one underneath. AI spending is now bumping hard
against memory. Hyperscalers — the big cloud builders like Amazon,
Google, and Microsoft — have shifted memory from 8% of their build
budgets to an estimated 30% in a single cycle. That capital has to go
somewhere. If the constraint is memory, and the build can't move without
it, shouldn't an investor own the layer AI runs on?

View HBMX fund holdings →

Distributor: Foreside Fund Services | Investing involves risk including
possible loss of principal.

<Link = http://www.hbmxetf.com/>

$U ( ▲ 0.71% )

A rare green name yesterday, plus an undercut and rally at the 50 day moving average.

Unity may be the cleanest “AI victim becomes AI beneficiary” setup in software. Atreides made U its second-largest disclosed common-equity position at quarter-end, owning 12.4 million shares plus call options; a 13F cannot tell us Gavin Baker’s exact thesis, but the likely logic is twofold. First, Unity’s Vector AI advertising engine uses proprietary game and player-behavior data to match users with games more effectively—strategic Grow revenue rose 49% year over year in Q1, with Unity crediting Vector for the acceleration. Second, Unity owns one of the dominant creation environments for interactive 3D worlds, giving it potential leverage to AI-generated games, digital twins and robotics simulation, while its new agentic Unity AI tools make those environments faster and cheaper to build. In other words, the bear case says AI replaces the game engine; the bull case says AI causes an explosion in interactive 3D content—and Unity owns both the creation rails and the monetization loop.

The H.E.A.T. (Hedge, Edge, Asymmetry and Theme) Formula is designed to empower investors to spot opportunities, think independently, make smarter (often contrarian) moves, and build real wealth.

The views and opinions expressed herein are those of the Chief Executive Officer and Portfolio Manager for Tuttle Capital Management (TCM) and are subject to change without notice. The data and information provided is derived from sources deemed to be reliable but we cannot guarantee its accuracy. Investing in securities is subject to risk including the possible loss of principal. Trade notifications are for informational purposes only. TCM offers fully transparent ETFs and provides trade information for all actively managed ETFs. TCM's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. Trade notification files are not provided until full trade execution at the end of a trading day. The time stamp of the email is the time of file upload and not necessarily the exact time of the trades. TCM is not a commodity trading advisor and content provided regarding commodity interests is for informational purposes only and should not be construed as a recommendation. Investment recommendations for any securities or product may be made only after a comprehensive suitability review of the investor’s financial situation.© 2026 Tuttle Capital Management, LLC (TCM). TCM is a SEC-Registered Investment Adviser. All rights reserved.