This is the best thing CitriniResearch has ever done.

On Friday at 6:52AM, we published a note to our chat detailing our take on the implications of deepseek for the AI trade. Our conclusion was to go long Phase 2 (software/agentic AI enablers) and short SMH.

We spent the day going through our AI basket with a fine tooth comb. What could stay in if funded by short SMH, what needed to be added, what absolutely had to go.

Four minutes before the market closed on Friday, at 3:56pm, we published our finalized updated AI basket.

Our changes were drastic.

Our new additions: the AI basket was now ~50% short $SMH and long a collection of those Phase 2 software names - most of which closed green today.

Additionally, we expanded our deletions of data center buildout names despite already having deleted NVDA a month ago.

Without our community, we might have felt pressured to wait until we had an in depth piece filled with our analysis to pair with these changes, but we gave our subscribers a heads up and they gave us the all clear. Unlike previous updates, we felt enough urgency to release our trades first before the market closed and then release our analysis over the weekend.

Myself, @rennyzucker and @nicholastreece worked through the weekend to prepare that analysis in a way that accurately communicated a nuanced take while not slighting our high conviction.

On Sunday, we released our analysis. The conclusion: the intricacies aside, the market would take deepseek as extremely bearish for Phase 1 and generally bullish for Phase 2.

Within 12 hours, it was the most viewed article in our entire archive.

Today, the CitriniResearch AI basket was down 14bps.

if we had not made these changes, it would have been down more than 7%.

A huge thanks to everyone involved in this, I have never been more proud of our work, our team and our collective dedication to keeping our readers informed as to actionable and timely insights. 🥂

Also, I really do feel a debt of gratitude to the @SubstackInc platform for the way in which we were able to handle this. Through the chat we were able to keep constant contact with our readers and update them in real time, rather than have them kept in the dark while we wrote.

This is going to seem insincere but it really isn’t - I don’t have a 100% hit rate obviously. But something I have been able to do well consistently in markets is recognize inflection points in sentiment. I was extremely worried I’d get a bunch of people long AI infra and then have them feeling like I lead them off the cliff.

I have been straight up paranoid about this since the day we published our first piece on AI beneficiaries.

I don’t know if this is the turn or a blip, the market has humbled me much harder than a scenario where SMH is up 10% tomorrow. But I am comfortable that we have demonstrated to our readers that we are on top of the threats to our views wherever they might arise.

Anyway, crazy week. It’s Friday, right?