Long AI / Short Consumer
A macro pair trade on the AI revolution
Thematic pair trade
This was a thematic call I made in mid-to-late 2025. My read on the macro environment was clear: the consumer was struggling, but AI was not slowing down. The logical expression was a pair trade. Go long AI, short the consumer.
On the long side, I started with AMD to get AI exposure. On the short side, I went after consumer names I thought were vulnerable: Under Armour (UAA), Chipotle (CMG), and Macy's (M). I also shorted the homebuilders as part of the broader consumer weakness thesis.
As the trade evolved, I rolled my AMD gains into Lemonade, which became my preferred way to express the long AI side of the thesis. The vehicles changed, but the theme held. Consumer stocks got killed and AI stocks did well. The call was spot on.