Hello Trader,
Financial media NEEDS to pin the volatility on something…
…geopolitics…quarterly rebalancing…seasonality…pick your boogeyman.
I pay attention to something simpler: where the money actually flows.
You see, every dollar sold means that dollar gets put to work somewhere else, whether it’s in your trading account or, more often, another stock.
This week, I want to show you where that capital is rotating right now.
And it’s probably not where you think.
By the end of this, you’ll know which sectors I like (biotech), and more importantly, why the next leg of the AI trade is already underway.
Since late March, one sector owned the tape. That sector was technology. We rode it hard. It delivered.
Lately, I have been flagging something new: Biotech.
If you have been following along, the chaos in the indices barely touched you. The reason comes down to where AI goes next. Its frontier reaches past chips and data centers. It runs straight into biology.
You don’t have to take my word for it. Here is what Anthropic CEO Dario Amodei said in a recent podcast interview:
“I think biotech is about to have a renaissance… ultimately driven by AI.”
He went further on the same point. “My instinct is we’re about to cure a lot of diseases.”
That is the CEO of one of the most well-funded AI companies on the planet. He is not a permabull posting charts on fintwit.
Why This Makes Sense Right Now
I did not land on this thesis through a gut feeling. I got here through sector rotation models. They are the same models I use to toggle between risk-on and risk-off positioning.
Rotation is the engine underneath every cycle. Capital crowds into a winner. The winner gets expensive. Money starts hunting for the next place to work. That hunt is how leadership changes hands.
Here is what those models are telling me right now:
- Tech has led since late March. Dominance like that always fades with time.
- AI as a theme is not slowing down. It is expanding well beyond semiconductors.
- Biotech is absorbing capital rotating out of crowded tech names.
- The setups showing up in the Trinity Terminal have been some of the cleanest I have seen all year.
Amodei pointed to concrete areas where this plays out. Peptide-based therapies. Cell treatments like CAR-T. These are spaces where AI-driven design can compress years of lab work into a fraction of the time.
He has gone as far as to say AI could pack a century of biological progress into five to ten years. Even a sliver of that becoming reality reprices the entire sector.
Nothing runs forever in this business. Tech’s run was real. The rotation into biotech is just as real.
This Move Is Still Early
None of this means the path runs smooth. Short-term pullbacks come with every rotation. I treat those dips as chances to add, not reasons to run for the exits.
I grew up in Michigan, where you learn to read the sky before the storm shows up. Markets work the same way. You watch the signals while everyone else reacts to the noise.
I even argued this thesis out with a few AI models. They listed every risk in the book. The setups still won the argument.
While the headlines obsess over the next geopolitical scare, I am hunting the next leg of the AI trade. That leg is in biotech.
Positions matter more than opinions. So here is mine. I have shared a handful of individual setups across the Trade Desk, the Trinity Trade, and the Million Dollar Challenge over the past few weeks.
Those names have been the strongest performers in those portfolios by a wide margin. That is the tape confirming the thesis.
The best part is the timing. This rotation is still in its early innings. It is not too late to get involved.
Watch the setups. Size your positions with discipline. I will keep you posted as this develops.
If biotech is the next chapter of the AI story, you want to be positioned before the crowd catches on.
Take Care,
Gianni Di Poce
