AI Is Not Hype, But the Massive Buildout Will Take Much Longer Than Expected

March 29, 2026

The last couple of weeks have been brutal for the market, especially for AI-related stocks. The Nasdaq Composite closed at 20,948.36 on March 27, 2026, down over 2% that day alone, extending a painful correction.

In my previous video I warned we might see a significant correction or even bearish pressure. Today I want to share my updated thoughts on where we stand and what I expect going forward.

Let’s Be Clear: AI Is Not Hype

Some people still dismiss AI as overhyped. I’m not in that camp at all.

Over six months ago — back when most people were still figuring out how to use these tools effectively — 98-99% of the code and content for retailtrader.ai was written by AI. It has been a massive differentiator and productivity booster for me personally.

The capability of AI today is real and transformative. That part is no longer debatable.

The real question is execution — specifically, how long it will actually take to build out the massive physical infrastructure (data centers, power, etc.) that the biggest AI ambitions require.

Why Tech Underestimated the Data Center Buildout

Tech companies are used to fast software cycles, but the physical world moves much slower.

Several major headwinds are converging at the same time:

Power shortages: There simply isn’t enough reliable power to run these massive data centers without straining or even risking the grid. Interconnection queues stretch for years in many regions.
Local opposition — rightly so: Communities are seeing their electricity bills rise sharply due to the enormous new demand. Residents are pushing back on higher utility rates, water usage for cooling, noise, and industrial-scale development. Dozens of projects have already been blocked or delayed, representing billions in planned investment.
Rising gas prices from the Iran conflict: The ongoing war has driven up energy costs significantly. This adds further pressure on household budgets and is likely to intensify protests against new data center projects that could push electricity bills even higher.
Broader geopolitical risks: U.S. allies drifting toward digital sovereignty and fragile global supply chains for chips, equipment, and energy add another layer of uncertainty.

Tech companies modeled very aggressive timelines assuming smooth sailing. Reality is proving far messier, slower, and more expensive.

My core view: The entire AI buildout will likely take much longer than most Wall Street models and investors expected. Many funds and institutional players operate on short time horizons (quarterly performance, redemptions, incentive structures). They may not have the patience or dry powder to wait through multi-year delays. This mismatch is already contributing to pressure on pure AI valuations.

Technical Perspective: More Choppiness Likely

I rarely rely on backward-looking indicators like moving averages. However, during steeper sell-offs they can provide useful context because many large players watch them closely.

What stands out right now:

A majority of stocks, especially in big tech, have fallen well below their 200-day moving average.
There is a noticeable and widening gap between the 50-day and 200-day MAs, and the 50-day is still trending lower.
While weekly moving averages look more constructive, the mismatch between daily and weekly timeframes suggests prolonged choppiness, rotation, and volatility rather than a quick V-shaped recovery.

Even if the immediate selling pressure eases, I do not expect the market to bounce back instantly. Range-bound action with plenty of fakeouts feels more probable.

Leverage Risks in the AI Space

This slower buildout environment also amplifies other risks — particularly over-leverage and concentration.

A clear example is SoftBank and its massive bet on OpenAI. SoftBank has committed additional capital, bringing its total exposure to approximately $64.6 billion (~13% stake). They have taken on significant loans to fund portions of this, and S&P has cut their outlook to negative citing liquidity and concentration risks in illiquid assets.

When a major stock like SoftBank trades more than 50% off its highs, it usually signals deeper structural concerns. This level of leverage and single-name concentration becomes especially dangerous if the AI infrastructure rollout drags on.

If a Rally Comes: Shovel Sellers, Not Gold Diggers

I’m a big admirer of Ray Dalio’s thinking. I have his original Principles book (from when he first started giving them away) and one of the pens he used to include. I still re-read sections regularly and follow his recent commentary.

Dalio has pointed out that people think they’re “betting on technology,” but they’re really betting on specific companies — most of which won’t survive the intense competition and sorting process.

I agree. If we eventually see a sustained rally or blow-off top in AI enthusiasm, the real winners are unlikely to be the pure “gold diggers” (foundational AI model companies facing disruption and monetization challenges).

Instead, I expect the shovel sellers to outperform — the companies providing the picks and shovels for the buildout:

Power and energy infrastructure
Electrical and cooling equipment
Data center construction and site development
Copper, aluminum, fiber, and related materials

These businesses benefit from the enormous capex regardless of which AI player ultimately “wins.”

Final Thoughts: Nobody Knows for Sure

Some of the risks we’re seeing — geopolitical tensions, the Iran conflict, ally relationships — could shift rapidly. A spectacular deal or de-escalation could ease energy pressures quickly. Nothing is set in stone.

At the end of the day, nobody knows exactly what will happen. My edge comes from building a grounded thesis based on both fundamentals and technical context, then watching how the market behaves relative to that thesis. This is far more useful than blindly following chart patterns or moving average crosses.

I hope this analysis gives you a clearer, more realistic perspective on the current environment.

What’s your take? Do you expect more choppiness, or a faster recovery once some headwinds ease? Drop your thoughts in the comments — I read every one.

Stay thoughtful and trade smart.

— Pashant RA
Founder, retailtrader.ai