Back in April, when the AI trade was still all the rage and doubts about its viability would only emerge a few months later, we laid out what we believed was the "next AI trade": not the picks and shovels provided by the Nvidias of the world to power various chatbots (which the prevailing narrative claims will change the world, yet which continue to hallucinate and be mostly used by college students to write their essays), but rather the power plants and infrastructure needed to run the energy-gobbling data centers that would house said Nvidia chips; one topical soundbite from the April note: "A new Micron chip factory in upstate New York is expected to require as much power by the 2040s as the states of New Hampshire and Vermont combined."

As such our advice to readers was to ignore the core AI hype, and instead to get exposure to AI via the various derivative trades, such as infrastructure, electrification, power grid, and energy. After all, none other than Goldman's head of single-stock research Jim Covello had warned just a few days prior in his weekly Markets/Macro note (available to pro subscribers here) that the core AI theme appears exhausted and that investors should start looking at alternatives as even the companies at the forefront of the AI revolution are seeking to "manage near-term expectations." Said otherwise, the easy money had been made, and now the market will increasingly reward those investment dollars that don't seek a quick return.

One convenient place to find an alternative investment exposure was in what Goldman dubbed its Power Up America basket (Bloomberg ticker GSENEPOW).