A strange chill is running through the market, and it’s not just the calendar flipping toward fall.
On Thursday, ADP dropped a bomb: Private employers added only 54,000 jobs in August, a big miss from the 75,000 economists expected and down from the 104,000 reported in July.
Wage growth is cooling off, too. That’s a one-two punch Wall Street didn’t see coming.
And with the BLS payroll numbers dropping tomorrow, odds are we’re about to see more confirmation that the labor market is losing steam.
Translation: The economy’s slowing down … fast.
So now everyone’s betting the Fed is going to have to cut rates sooner rather than later — even if they don’t want to. Because the math is starting to get ugly.
Meanwhile, none of that is slowing down the stampede into AI.
The nature of the stampede is something traders need to watch.
Here’s the best way to capitalize on AI in spite of what’s happening in the larger economy.
Look Down the Foodchain
Wall Street’s rotating — hard — but it’s not out of tech.
It’s out of the obvious AI names and into the second-tier players and the companies quietly soaking up demand from the margins.
It’s no secret that Nvidia lit the match. That stock went vertical because they make the hardware that powers the AI revolution.
And while I’ve traded NVDA more times than I can count, I’m watching something else now.
The real money is moving down the food chain.
We’re talking about the companies enabling AI, like data centers, optical networks, and enterprise software. Think chip testing, energy infrastructure, and cooling systems.
It’s the boring stuff nobody wants to talk about on CNBC, but the kind of names where institutions are quietly loading up.
Frankly, a company like Nvidia can’t triple again without rewriting reality. But the smaller names riding on its coattails can double and still look cheap.
Here’s what I’m doing right now as a trader:
I’m tracking institutional order flow — watching where the size is going. Not just what’s going up, but what’s being bought during the dips.
And lately, that flow is heading into:
- Cloud infrastructure stocks — names that handle traffic, storage, and scaling for AI applications.
- Semiconductor equipment companies — not the chipmakers themselves, but the ones making the machines they use.
- Power management firms — AI eats electricity like candy. Data centers need reliable, scalable power. That’s a quiet corner of the market that’s catching fire.
- AI integration plays — especially in finance, defense, and healthcare.
These aren’t stocks that make headlines, but they’re trading like somebody knows something.
That “somebody” tends to be the funds who do know something, or at least have a better Rolodex than most retail traders.
And that’s the edge right now.
Because while the headlines scream about jobs and rate cuts and politics, the smart money is positioning for the next leg of the AI trade — not the hype, but the infrastructure.
That’s where the alpha is.
The Right Kind of Tech
If you’re only watching the Magnificent 7, you’re missing the rotation. If you’re waiting on Fed Chair Powell, you’re behind the trade.
This market is changing shape in real time. It’s not about buying tech — it’s about buying the right kind of tech.
And right now, that means watching the second-wave AI stocks that are quietly setting up for a big move, even while the headlines are all about rate cuts and job misses.
Pay attention. The market’s speaking.
And the smartest traders I know are already moving.
Stay street smart,
Jeff Zananiri
P.S. Want to see real trades, in real time? This Saturday at noon ET, Aaron Hunziker’s walking through exactly how he’s attacking this market — what he’s trading, why he’s trading it, and how he’s staying ahead of the crowd.
Show up, dial in, and see how the pros get it done.
*Past performance does not indicate future results
