Christian Mueller-Glissmann

Within the AI ecosystem, the hyperscalers (Magnificent Seven) are well positioned right now because they own much of the infrastructure and are likely to start focusing on monetizing AI rather than just spending. Positioning and momentum in semiconductor stocks had become extreme, and a reversal back into the hyperscalers is underway, with dispersion continuing to create winners and losers. The hyperscalers should trade better in the near term as the rotation out of semiconductors gathers pace.

Semiconductors have led the AI bull market and are now heavily positioned with leverage via levered ETFs and options, making them very volatile. Hyperscalers have not performed as well and offer a less crowded way to participate if AI momentum continues. Therefore, diversify toward hyperscalers and away from semiconductors.

If the Strait of Hormuz reopens (Iran deal), European equities would benefit significantly from rates relief and fading ECB hike expectations, as Europe has been the biggest loser from the Middle East war.

Speaker stated they are "overweight cash" and "short fixed income" as a place to find safety in the current high-velocity, stagflationary phase of the conflict. The Iran conflict is a stagflationary shock where equities and bonds cannot hedge each other, leaving few safe havens. Short-duration fixed income and cash provide defensive ballast. LONG cash and SHORT fixed income is a tactical, defensive allocation for portfolio protection during this uncertain period, not intended to be held long-term. A swift diplomatic resolution to the conflict could reduce the need for such a defensive posture, making this a crowded trade.