It's beginning to look as if the artificial-intelligence trade bloodbath on Nov. 5, was just a blip and that the numerous Wall Street firms that said the midterms election selloff was overdone were correct.

That appeared to be spot-on as the best-performing S&P 500 stocks since the selloff pointed to continued strength in the AI trade.

Advanced Micro Devices stock, as of Tuesday, has risen 29% since the closing bell on Nov. 5. That makes the chip maker the best S&P 500 performer since the stock tumbled more than 17% on Nov. 5.

Shares of the optical-networking company Coherent also have gained 29% since the selloff, good enougg to make it the index's second-best performer. AI and AI-adjacent stocks are littered throughout the 20 best performing S&P 500 stocks since the Nov. 5 selloff, such as Broadcom and Comfort Systems, which have risen 12% and 15%, respectively.

Marvell Technology and Lumentum have gained 15% and 16%, respectively since Nov. 5. That's quite the turn of fortunes after historically bad performances last week following the two companies announcing on they planned to merge on Nov. 2.

Barron's last week argued that the selloff could mean more attractive entry points for Broadcom and AMD among others.

The health of the rebound is even more evident looking at the PHLX Semiconductor, or SOX, Index. The only two components that haven't booked an advance since last Thursday in that index are Nvidia and Microchip Technology. Nvidia, of course, has been plagued by its own problems with CEO Jensen Huang.

As investors buy the dip in AI-related stocks, it's proving many firms on Wall Street were correct when they said the stock market overreacted to Democrats winning control of Congress and key gubernatorial races, which many believed would usher in stricter data-center regulations.

"We see the market moves as an overreaction and think the ultimate impact will be a push-out of some projects from 2028 to 2029, rather than a derailing of the capex story," a Morgan Stanley analyst team said in a research note.

William Blair analysts Tim Mulrooney and Jed Dorsheimer last week said the most likely scenario was that there would be "near-term volatility" in AI infrastructure stocks.

Morgan Stanley analyst Ariana Salvatore added last week that the decisive election results for Democrats pointed toward "incrementally negative AI sentiment" in the near term.

Judging by how AI trade-related stocks have bounced back, that "near-term" concern was even more near-term than expected.