The best of the AI trade could be behind us. Here’s how to prepare, according to Barclays.

Barclays suggests the most explosive phase of the AI-driven market rally may already be in the past, according to a note from the London-based bank. Its guidance to investors is not to abandon the theme but to become more selective: hold on to Big Tech positions into upcoming earnings, while favoring companies whose business models can support their valuations over time.

The distinction matters because AI enthusiasm has lifted a broad range of technology names, not all of which have shown how AI spending translates into durable revenue or margins. As earnings season approaches, results and forward guidance will test whether those expectations are justified. Companies with pricing power, recurring revenue, and clear paths to monetizing AI may prove more resilient than those trading mainly on narrative.

What to watch: upcoming Big Tech earnings, capital expenditure plans tied to AI infrastructure, and any commentary on demand trends. For market observers, the takeaway is that the AI trade may be maturing from a broad rally into a stock-picking environment, where business quality and execution carry more weight than sector exposure alone.