The AI ‘bottleneck trade’ has run its course, says this hedge-fund manager and early SpaceX investor

The AI ‘bottleneck trade’ has run its course, says this hedge-fund manager and early SpaceX investor Barbara Kollmeyer Tue, June 16, 2026 at 3:44 PM GMT+2 5 min read SPCX BRN00 ^DJIA YM00 ^COMP Indian Prime Minister Narendra Modi pictured with OpenAI CEO Sam Altman, center, and Anthropic CEO Dario Amodei in February. Investors need to stop relying on the AI bottleneck trade, says Gavin Baker. - Ludovic Marin/AFP/Getty Images The stock market is off to a mostly cautious start Tuesday after the best three-day run for the S&P 500 in 13 months, even as SpaceX keeps running higher since its blockbuster IPO.

But no trade lasts forever. Most Read from MarketWatch An oil bull’s ‘insane’ bet: Why this veteran trader is buying energy stocks as crude prices tumble My mother was co-owner of my late grandmother’s bank account. Should she share the money with her siblings?

And one hot AI trade that is starting to wind down is the “bottleneck trade,” says Altreides Management managing partner Gavin Baker. The hedge-fund star is referring to companies involved in important facets of the artificial-intelligence build-out, like memory-chip producers DRAM. “This bottleneck trade is nearing its end,” he said.

He pointed to the decision by Japan’s Ajinomoto, whose shares JP:2802 have soared this year, to refuse to lift prices on a product that helps insulate layers that connect processors to chips. “Everybody’s having Claude run ‘What’s the next bottleneck? ’ That was the game for the last year; the next game is what has enduring franchise value on the other side of these bottlenecks, whatever that is,” he said in an interview with TBPN that aired Tuesday.

Baker then turned to SpaceX, where he was an early investor. He said the investing public will focus on a longer time horizon than quarterly earnings. “The first is just how quickly can they bring on terrestrial compute.

It does seem likely that they monetize gigawatts at a higher rate than anyone else,” he said. “Everyone in the ecosystem is really incented to get land and power in the hands of people who can energize it, because everyone starts to make more money when the GPUs are energized,” he said. Earlier this month, SpaceX CEO Elon Musk, who’s also the CEO of Tesla TSLA, laid out plans for solar-powered orbital AI data centers to address the growing artificial-intelligence energy demands.

SpaceX has said its first AI satellite could handle 150 kilowatts of AI computing, with a goal of 1 gigawatt per year by late 2027. “So how quickly they can add gigawatts matters,” said Baker. While he’s pretty excited, alongside Musk, about the ideas of cities on the moon and asteroid mining, Baker said SpaceX has “much more tangible near-term drivers here,” and figures the team at SpaceX may have more confidence in bringing those gigawatts online.

That’s as SpaceX has ordered 20% of Nvidia’s NVDA powerful Rubin chips, he noted. Another unappreciated aspect of the SpaceX IPO is that over 10,000 employees bought it, said Baker, which, he noted, is a counterpoint to exhaustive analysis of the share-lockup schedule. Story Continues “The reality is that SpaceX employees own a lot of this, and if you’re an employee or even if you’re an investor who has [access via a special-purpose vehicle or] an SPV or you’re directly on the cap table, you’ve had a chance to sell every six months for the last 10 years.

If you wanted to sell, you could have sold when they did that offering in the second half of last year. ” Read: Micron and Sandisk shares are phenomenally ‘overbought. ’ Are memory stocks flying too close to the sun?

The markets The Dow Jones Industrial Average DJIA jumped at the start of trading, while the Nasdaq Composite COMP is lower and the S&P 500 SPX is flat. Oil prices CL. 1 BRN00 are down over 3%.

Key asset performance Last 5d 1m YTD 1y S&P 500 7554. 29 2. 01% 2.

04% 10. 35% 25. 21% Nasdaq Composite 26,683.

94 2. 91% 2. 27% 14.

81% 35. 44% 10-year Treasury 4. 445 -7.

70 -22. 60 27. 30 5.

70 Gold 4366. 1 1. 90% -2.

66% 0. 78% 28. 17% Oil 78.

69 -11. 29% -24. 36% 37.

07% 6. 71% Data: MarketWatch. Treasury yields change expressed in basis points The buzz An overnight spike in SpaceX shares SPCX saw it overtake Amazon as the fifth-largest U.

S. company. SpaceX announced a plan to buy the company behind the Cursor coding app at a valuation of $60 billion.

Goldman Sachs has trimmed its oil-price forecast. Dave & Buster’s stock PLAY is tumbling after the chain reported disappointing results. Housing starts fell sharply by 15.

4% to 1. 17 million in May, below the 1. 43 million expected, while import prices climbed a higher-than-expected 1.

9% in May. China’s consumer spending fell for the first time since the pandemic . The Bank of Japan raised interest rates to 1%, the highest level in decades.

Best of the web Options traders are bracing for a very busy week, with June ‘triple witching’ and launch of SpaceX contracts on deck . Shipowners won’t risk Strait of Hormuz until they know peace deal is ‘material. ’ The dangerous tech found aboard dark-fleet tankers captured by the U.

S. The chart - The chart from Michael Kantrowitz, chief investment strategist and head of portfolio strategy at Piper Sandler, makes the case that a recent stock rebound will inspire Wall Street strategists to push their S&P 500 forecasts toward 8,000 over the summer. He said the chart, which “fits like a glove” since 1998, shows those forecasts tend to follow the markets by 60 days.

Yardeni Research’s Ed Yardeni currently holds the top S&P 500 forecast for 2026 of 8,250, while most of Wall Street is under the 8,000 level. Top tickers These were the most searched ticker symbols on MarketWatch as of 6 a. m.

: Ticker Security name SPCX SpaceX NVDA Nvidia TSLA Tesla MU Micron AMD Advanced Micro Devices TSM Taiwan Semiconductor Manufacturing GME GameStop AAPL Apple MSFT Microsoft PLTR Palantir Random reads Starbucks Korea shutting all stores for a mandatory history class. Cape Verde’s shocking tie with Spain cost Polymarket bettor $1 million . Also upset: Why Cape Verde’s hero goalie cried after incredible Spain draw.