The AI trade in focus: Altimeter's Brad Gerstner joins 'Halftime Report' live in San Francisco

The current market volatility in AI-related stocks stems from concerns regarding whether explosive revenue growth can justify massive capital expenditure build-outs. While high interest rates and debt levels create pressure on infrastructure-heavy firms, the broader economy remains resilient, evidenced by strong retail sales and record-low jobless claims. Investors are increasingly rotating away from concentrated semiconductor and Magnificent Seven positions toward enterprises capable of weaponizing AI to drive operational efficiency and cost savings. This shift marks a potential transition in the AI trade, where the focus moves from the builders of the technology to the companies effectively deploying it. Despite recent consolidation and market chop, long-term growth prospects for 2027 and 2028 remain positive, as valuations for healthy, cash-generating companies become more attractive amidst the broader market rotation.