The AI Trade is Back - Signal & Noise: Weekly Signal Report, August 11th 2026

Nvidia's recent announcement has changed how the market is viewing CAPEX spending and borrowing.

Issue No. 12 · Tuesday · August 11, 2026

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What’s Inside:

1. At a Glance - A “weight of the evidence” look at the current market environment, as well as my Regime map.

2. The Call - A deeper dive into what I am seeing

3. Under the Hood - Current market internals, sector breadth, and intermarket analysis.

4. Sector Watch - Which sectors pass/fail the screening process.

5. Current Screen - Which stocks pass the screening process.

6. What I Am Watching - Stocks I am watching that are approaching a passing grade in the screening process. Plus, what changed from last week.

(Current ARTAIS clients, please reach out to me for a free paid subscription)

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At a Glance

Market regime: Risk On

The Call

In last week’s report, I discussed the current rotation of the market and how the rotation was indicating a “risk on” environment.

This week, the rotation continues to favor “risk on” with the Tech and Consumer Discretionary sectors showing the greatest improvement in positive momentum.

If you are not familiar with Relative Rotation Graphs (RRG), they typically rotate clockwise. This allows us to see the rotation from “risk on” to “risk off” and back, in real time.

I track the following themes, and by placing these themes on an RRG, the rotation between risk on vs off becomes clearer:

(Current ARTAIS clients, please reach out to me for a free paid subscription)

The allocation of stocks within the ARTAIS Universe that pass my screen continues to expand (see below) and highlights the risk-on theme. However, Industrials and Materials are also showing strength.

The Industrial and Materials sectors have been participants in the AI growth theme, as these two sectors are necessary for the buildout of the data centers that are needed to support the growth in AI.

Current Sector weighting of ARTAIS names passing the screen

So from my viewpoint, the AI trade is back to the forefront for investors.

Part of this is being driven by the focus on CAPEX spending. The most recent earnings calls have been focused on how much the companies involved in AI are spending.

Some investors are getting worried about how this growth is being funded. Currently, hyperscalers (cloud/data center operators like Amazon, Alphabet, Oracle, Microsoft, etc.) are set to invest over $700 billion into AI computing in 2026 alone.

This funding has been labeled circular financing. Circular financing occurs when one company, like Nvidia, invests in an AI company. The AI company then turns around to buy semiconductor chips from Nvidia.

To help better explain this, I used Claude to give me an ELI5 (explain it to me like I am 5) version of how circular financing works: