A daily reading of how greedy or fearful the market is about AI stocks, on a scale from 0 to 100. It works like the fear and greed gauges for the broad market, but every input is about the AI trade: the chipmakers, the equipment makers, the networking and power suppliers, and the cloud platforms that buy from them.
The Last Three Years
What Moves the Reading
How the Index Works
Seven inputs are each scored from 0 to 100 and averaged. Six come from prices, measured week by week, with the current week updating every trading day. Each of those is compared with its own last two years, so a score of 80 means the reading is higher than in 80 percent of the weeks in that period. The seventh comes from what the companies themselves are saying.
- Momentum. An equal-weight basket of 18 AI stocks against its 25-week average, about 125 trading days. Far above the average is greed.
- Relative strength. The basket’s 4-week return minus the S&P 500’s. Money chasing AI over everything else is greed.
- Breadth. The share of basket names above their own 10-week average. A rally carried by two or three names scores low even when the basket is up.
- Volatility. The basket’s 8-week volatility against its one-year norm. Wild swings count toward fear.
- Speculation. Trading in the 3x leveraged bull chip ETF (SOXL) as a share of trading in it and its bear twin (SOXS) over the last two weeks. Retail leverage on the long side is greed.
- Rotation. The AI basket against software stocks (IGV) over 4 weeks. AI infrastructure leading software is a sign of confidence in AI spending.
- Sentiment. Company guidance and press releases. When chip and infrastructure companies report, their next-quarter revenue outlook is compared with the quarter just reported, with extra weight for beating or missing their own earlier guide. Press release tone adds a smaller part. This input comes from the earnings guidance tracker and the daily chip and AI infrastructure digest on k4i.com.
The basket: NVIDIA, Broadcom, AMD, TSMC, Micron, SanDisk, ASML, Marvell, Applied Materials, Lam Research, Arista Networks, Vertiv, Microsoft, Alphabet, Meta, Amazon, Oracle and Palantir.
The zones. 0 to 24 AI Winter, 25 to 44 Cooling, 45 to 55 Neutral, 56 to 75 Hype, 76 to 100 AI Mania. The index updates after the US close on trading days.
The AI Market Analyzer is a market sentiment indicator, not investment advice. Extreme readings have historically come before reversals as often as before continuations.
