Inside Edge Capital Trims AI Exposure 13.5% as Nasdaq-100 Rebounds

Inside Edge Capital, LLC founder Todd Gordon trimmed AI-related exposure in the firm’s growth portfolio by 13.5% and added a Nasdaq-100 hedge as a rebound brought the index back toward 30,000.

The firm put on a 5% hedge against the Nasdaq through the ProShares Short QQQ (PSQ) exchange-traded fund. It also increased its energy and health care positions.

The adjustments came before growth stocks rallied on Oct. 20. The Nasdaq-100 then moved back toward 30,000, an area Gordon considers a test for the rebound. His portfolio changes follow a shift away from technology and toward value-oriented sectors that he has tracked since early summer.

Semiconductor stocks provide one measure of that shift. In Gordon’s comparison, the VanEck Semiconductor ETF (SMH) has trailed funds tracking the S&P 500 and Nasdaq-100 since their relative performance ratios peaked around June 1. Both ratios are now near levels he considers support.

Each ratio compares the semiconductor fund with an index fund. A falling ratio means SMH is lagging that benchmark, even if both funds rise. A further decline from the current levels would reinforce Gordon’s view that the move away from semiconductors is continuing.

The Nasdaq-100 chart presents another test. It shows highs in June and September, followed by a break below an uptrend line and the index’s 21- and 50-day moving averages. The subsequent rebound has brought the index back toward the area of that break, near 30,000. Gordon views the area as potential resistance after it previously served as support.

Gordon expects resistance to hold. If the Nasdaq-100 moves past it, he plans to remove the hedge and restore the AI-related exposure he trimmed, potentially at higher prices.