Here in Calgary, this week marks the start of the Calgary Stampede, a 10-day celebration of rodeo, cowboy hats, and, for the brave (or slightly reckless), riding 2,000-pound bulls determined to throw you off in under eight seconds.

In many ways, the AI trade has felt a lot like that lately: an incredible ride… as long as you can stay on.

For the last two years, the AI trade has been built on one simple idea: there’s not enough compute to go around. That scarcity has driven massive gains in semiconductors, memory stocks, and anything tied to AI data centers. If you make chips, memory, cooling systems, or power equipment, business has been very good.

Then yesterday, the AI bull gave investors a hard jolt. Meta announced plans to sell access to its AI computing capacity. In plain English: after spending hundreds of billions building AI infrastructure, they may actually have excess compute to rent out.

That raises an uncomfortable question: If compute is so scarce… why does Meta have extra to sell?

The market reaction came down to two simple thoughts:

1. Good for Meta shareholders – if Meta can monetize excess capacity, maybe all that AI spending isn’t just a giant money pit. Investors liked the idea that Meta may finally generate a return on some of its enormous capex.

2. Potentially bad for AI infrastructure stocks – if Meta has spare capacity, maybe compute isn’t quite as scarce as the market believed.

That’s what hit semiconductor, memory, and AI infrastructure names yesterday. For a market priced on endless demand, even a small crack in the story matters. This doesn’t mean the AI bull is dead. But yesterday was a reminder that even the strongest bull can slow down once investors stop chasing and start questioning.

Enjoy the stampede this week and remember that Bulls are often fun to watch and bull markets are fun to ride… but much less fun when you’re underneath one. Stay disciplined, stay diversified… and maybe stay hydrated.

I have also included a piece from our CIBC Economics team entitled “Is AI inflation, dare we say it, transitory?”.

As always, if you have any questions, please feel free to give us a call at any time.

Have a great weekend.

Milan