Author is concerned about AI hype tail risk and asks how others hedge AI expectation risk, noting MU and TSM have ballooned in their portfolio and that index diversification may not help in an AI correction.
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We all know the bull run of the last year or so has been on the back of AI hype and the infrastructure around it. We also know that a couple bad earnings calls from a couple major players could cause a nasty price correction.
Is there anything you’re doing to hedge against the AI expectation risk specifically aside from general market hedging and diversification?
MU and TSM have ballooned their percentage of my portfolio with the recent growth and while I believe demand should continue for the next 6-12 months, I am concerned about tail risk and I don’t think diversifying to a market index would bring much relief in that event