The analyst highlights that early in a rally, positive earnings drive stock performance, but as expectations become universally positive, future narratives (1-3 years out) become the primary driver, leading to increased volatility. News regarding memory efficiency, supply expansion, or competitive threats can significantly impact these stocks, as current earnings take a backseat to long-term growth estimates.
High-beta AI and semiconductor stocks are increasingly sensitive to long-term narratives and supply/efficiency news, rather than immediate earnings, driving higher volatility.