After last week, you may be wondering if the AI trade is coming to an end.

Many of the stocks that have fueled the AI boom suddenly found themselves under intense selling pressure.

Micron. Taiwan Semiconductor. Broadcom. Marvell. Vertiv.

Some gave back entire months of gains in just a few short trading sessions.

Meanwhile, the headlines coming out of South Korea — a country with deep ties to AI — are almost unbelievable.

The AI-fueled Korea Composite Stock Price Index (KOSPI) tumbled last week on what commentators have labeled "Black Thursday."

More than one million investors across the market reportedly received margin calls, and regulators stepped in to suspend new leveraged ETFs.

Now social media is flooded with predictions that this could be ground zero for the end of the AI boom.

This raises a few questions, namely…

What on earth just happened?

And perhaps more importantly...

What do I do now?

Allow me to answer both of those for you.

South Korea: A Canary in the Coal Mine

Over the past year, South Korea became one of the world's biggest beneficiaries of the AI boom.

The country is home to SK Hynix and Samsung, two of the world's most important producers of advanced memory chips.

Those chips have become essential components inside the massive data centers powering today's AI revolution.

As enthusiasm surrounding AI accelerated, so did investor optimism.

New single-stock leveraged ETFs tied to companies like SK Hynix attracted enormous interest from retail investors, many of whom borrowed money to amplify their potential gains.

For a while, it seemed like a brilliant strategy.

As long as prices continued climbing, leverage magnified profits. But leverage is a double-edged sword. Once prices begin falling, the same mechanism starts working in reverse.

A modest decline triggers margin calls. Margin calls force investors to sell. That selling pushes prices even lower, triggering additional margin calls and another round of forced liquidations.

Within days, what began as an ordinary correction had snowballed into one of the largest leverage unwinds in recent memory.

So this isn’t really a South Korea story. It’s a leverage story.

Now here's where it gets a little more complicated. Did South Korea cause the selloff in U.S. technology stocks?

Not exactly.

South Korea simply exposed something that had quietly been building across the entire AI ecosystem.

Too much enthusiasm, too much leverage, and too many investors chasing the same winners.

Global investors don't buy technology stocks one country at a time. They buy themes, like AI, semiconductors, memory, networking, or data centers.

When one part of that trade begins to unwind, money often comes out of the entire group.

That's why companies like Micron, Taiwan Semiconductor, Broadcom, and Vertiv were all under pressure, even though very little had changed about their underlying businesses.

Importantly, the long-term investment thesis didn't suddenly disappear.

Demand for AI infrastructure remains enormous. Hyperscalers haven't abandoned their plans to build the next generation of data centers, and the need for advanced chips continues to grow.

The only thing that changed was investor positioning.

After one of the strongest runs we've seen in years, the market needed an opportunity to catch its breath.

Healthy Bull Markets Need Corrections

One of the biggest mistakes investors make is assuming every correction marks the beginning of a bear market.

History tells a very different story.

Many of the strongest bull markets on record experienced multiple corrections of 10%, 15% or even 20% before eventually reaching much higher highs.

In practice, these pullbacks were the mechanism that allowed the long-term trend to continue, rather than a sign of the end.

Think about what would have happened if stocks like Micron had continued climbing week after week without interruption.

Eventually, expectations become impossible to satisfy. Every earnings report has to be perfect while forecasts continue to rise. And every buyer who wants to own the stock already does.

That's not how sustainable bull markets work.

Instead, markets periodically remove excess optimism, flush out speculative leverage and reset expectations.

While those corrections are never pleasant, they often create a much healthier foundation for the next advance.

Throughout history, foreign markets have frequently acted as the canary in the coal mine.

They don't necessarily cause global corrections, but they often reveal where speculation has become excessive before the rest of the world notices.

This time, that messenger was South Korea.

Had this excess continued building for another six months, the eventual correction might have been far more severe than the one we've just experienced.

That answers the first “what just happened” question. Now let’s move on to the next one.

So... What Do You Do Now?

The answer is surprisingly simple. Don't panic or chase the first green day.

And don't convince yourself that every stock trading 50% or 70% below its highs is automatically a bargain.

This is especially important from an investing standpoint, rather than a trading one.

The best long-term opportunities usually emerge after buyers have regained control, not during the first bounce.

That's why I’m far more interested in evidence of a new trend than trying to catch the exact turning point.

As investors, that means looking for one — or ideally both — of two developments.

First, I'd like to see high-quality technology stocks begin trading between their 100-day and 200-day moving averages.

Historically, that's often where stronger foundations begin to develop after meaningful corrections.

Second, I'd like to see four weeks of steady, consistent gains.

Not explosive rallies that invite another round of speculation, but orderly price action that suggests institutional investors are quietly accumulating shares once again.

That's the kind of strength we can trust.

After a correction like this, many investors assume that the next winners will be the same as the last winners.

Sometimes they are. Often, they aren't.

That's why we're willing to wait. Rather than trying to predict where leadership will emerge next, we'll let the market tell us.

Even now, those new roots may be starting to form.

Many AI infrastructure companies continue working through their corrections, and some of the Mag 7 have shown relative strength.

Will they lead the market's next advance? Maybe, maybe not.

The market will always tell you where leadership is returning, which is exactly why I’m willing to wait.

For now, the best move is to stay patient and let the market come to you.

I’ll continue to watch earnings reports, monitor leadership, and wait for the kind of sustained strength that has historically marked the beginning of healthier advances.

When that evidence appears, we'll be ready to lean into it.