Citadel's Rubner Sees AI Stocks Regaining Leadership After U.S. Midterm Elections

Citadel Securities equity and derivatives strategy head Scott Rubner said investors may re-enter AI-related stocks after the U.S. midterm elections, potentially restoring the beaten-down trade's leadership next month. Institutional clients are waiting for political uncertainty to clear, while retail investors keep buying dips aggressively, he said. Speaking to Bloomberg Television on Tuesday at Citadel Securities' Global Markets Future Forum in New York, Rubner said clients are signaling they will buy at higher prices but not ahead of a major political event, as the election outcome should clarify AI regulation and industry policy. Chip stocks have already sold off sharply: the Philadelphia Semiconductor Index fell for eight straight sessions through Friday, down nearly 16%, while the tech-heavy Nasdaq 100 dropped 5.5% last week. BofA strategist Michael Hartnett expects investors to seek hedges in the weeks before the election amid elevated rates and inflation. Retail buying in semiconductors, emerging AI cloud firms and memory stocks hit a 16-week high last week, even as institutional clients cut leverage, Rubner said. The S&P 500 remains near record highs.