Okay so I wrote a variant of this article for FH Premium subscribers earlier this week.
But a lot of you have been asking for my thoughts on AI and the Iran war.
So I wanted to release this FH Premium article, with some edits, so that you guys know my latest thoughts on the issue.
3 topics I want to discuss:
- Has the AI bubble burst?
- Will the Iran war cause a market crash?
- Why I sold some of my REITs?
Let’s get right into it.
Has the AI bubble burst?
In recent articles, I shared that the market may potentially be in the midst of an AI to value stock rotation, but that for now it is not clear whether it will be a full rotation or a temporary pause in the AI rally.
Well, last week was a strong point in favour of the value stock camp, because you can see how AI stocks broadly sold off last week, with names like Micron down 12% on the week alone.
That being said if you pull up the charts of many AI stocks, the conclusion is still not so clear.
Many AI stocks are sitting on key support levels as we speak, so as of now it is still too early to make a conclusive call either way.
If AI stocks bounce from current levels, we could see a strong rally from these levels back to all-time highs.
Whereas if they break these key support levels, then well at least we know that the AI trade is over for now.
Fast forward to the end of the week – and you can see how these support levels have held for now.
Again – hard to say that the AI bubble is definitively over for now.
We just don’t have enough conclusive information from the price action.
My personal view on the AI trade?
There are times to be fearful, and times to be greedy.
This is one of those times in my view, where it’s genuinely too early to call.
I’ve said in recent articles that I’m going to wait and see, and so far at least I haven’t seen anything that would change my mind.
From a first principles, fundamentals perspective, the more I think about AI, the more I think the world is fundamentally short of compute.
Look at moves by Kimi K3 to restrict new account opening over the weekend, look at Anthropic having to limit Fable access to 50% of Max plans, look at Anthropic being forced to buy compute capacity from Elon Musk and now Mark Zuckerberg.
This is a world that is still desperately short of AI compute capacity.
And my own personal experience with AI is that the more I use AI, the more use cases I find for AI, and the more I keep coming back – and the more AI compute capacity I need.
So my gut feel is that from a fundamental perspective, the build out of AI infrastructure still has room to run.
That being said, when it comes to investments, while I’m an idealist, I also respect the price and trend.
No matter what I think, if the stock starts going into a downtrend, and key support levels break and hold below there, I will still sell the stock.
As of now, those key support levels are still holding (and actually bounced from there this week), so I’m holding onto my AI positions for now.
But that could change in the blink of an eye, and if the facts change, I change my mind.
You can see my full personal portfolio with what AI stocks I’m holding, and updates when I sell (or buy) on FH Premium.
Will the Iran war cause a market crash?
And then we come to the Iran war.
Quite a few of you have asked me for my thoughts on this.
I shared my big picture views on the Iran war on FH Premium last week, namely that neither Iran nor the US can secure outright victory at an acceptable cost, so both are likely to keep negotiating while fighting.
The broad probabilities are:
- Base case (55–60%) is a face-saving deal before Q4, potentially involving Gulf administration of Strait transit and sanctions relief for Iran, with oil easing toward the low-$70s by year-end.
- Tail risks are prolonged escalation (20–25%), pushing oil above $100, or one side effectively capitulating (15–20%), sending oil quickly into the mid-$60s.
The events over the weekend, with the death of US soldiers, and attacks on Iranian civilian infrastructure, definitely raised the probability of the prolonged escalation scenario.
War is war, and as much as Trump and Iran may want to reach a deal, sometimes when there are deaths the calculus changes.
But then again, Trump also likes to talk a big game – but when push comes to shove, fold like a pack of cards.
So you never really know.
Oil’s price here is instructive.
Despite all the events over the past week, Oil sits at $93, still below the earlier highs.
So for now at least, the market is still expecting some kind of peace deal.
But again this is similar to the AI trade above.
These things can change in the blink of an eye, so it would be foolish not to prepare for that possibility.
If Iran sends a cruise missile at a US warship and for some reason it gets through, causing a mass US casualty event.
Suddenly Trump cannot end this war as easily as he would like to, given mass public outrage.
So expect a base case deal, but prepare for the worst.
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Why I sold some of my REITs.
Which brings us to the final point.
A bit of background here.
Earlier in the year I was running about 9 – 10% of my portfolio in REITs.
As shared at the start of the year, with the bulk of the interest rate cut cycle behind us, I didn’t see the same tailwinds for REITs anymore this year, and therefore I intended to trim my overall REIT exposure
So I trimmed my REIT exposure earlier in the year, and I continued to do so last week.
So this isn’t so much related to the Iran war or the AI sell-off, and more of a broader asset allocation adjustment.
In terms of the exact REITs I sold (as some of you have asked), I sold Netlink Trust and Lendlease REIT, and I have trimmed my position in MPACT and Keppel REIT.
The good thing about this also frees up additional dry powder, and given the current market volatility, I can watch what happens next before choosing where to deploy the freed up capital.
You can see my latest personal portfolio, with updates when I buy and sell, on FH Premium.
So, those are my latest thoughts on the 3 developments above – love to hear what you think though!
This is an FH Premium article written on 20 July 2026. It will not be updated going forward.
My latest macro views, as well as my full stock watch and personal portfolio, are shared on FH Premium.