US Stocks Plummet as AI Bubble Fears Resurface
The market's brief respite from the artificial intelligence frenzy was short-lived. Just a day after Nvidia's upbeat earnings sparked a rally, stocks began to slide, with tech-focused indices taking a beating.
Wall Street initially rose on Wednesday, as Nvidia, the world's largest public company, assured investors that demand for its advanced datacenter chips remained strong. However, the optimism quickly dissipated, and technology stocks at the heart of the AI boom came under pressure. The benchmark S&P 500 fell 1.6%, while the Dow Jones industrial average slipped 0.8%. The tech-focused Nasdaq Composite took a bigger hit, closing down 2.2%.
Nvidia's stunning valuation of $4.4 trillion has led to an extraordinary surge in AI-related stocks over the past few months. However, concerns about a bubble have been growing as firms splurge on chips and datacenters in their pursuit of AI dominance.
While Nvidia's earnings exceeded expectations, fears persist that other companies are spending too much money on building AI infrastructure. "The people who are selling the semiconductors to help power AI don't alleviate the concerns that some of these hyper-scalers are spending way too much money," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
A mixed jobs report on Thursday morning, which showed healthy growth in the labor market but a slight rise in unemployment, reinforced expectations that policymakers will keep interest rates on hold at their next meeting. The VIX, a measure of market volatility, also surged 8%.
Shares in Nvidia sank 3.2%, and the AI-induced anxiety has investors wondering if the AI bubble is finally going to burst.
The market's brief respite from the artificial intelligence frenzy was short-lived. Just a day after Nvidia's upbeat earnings sparked a rally, stocks began to slide, with tech-focused indices taking a beating.
Wall Street initially rose on Wednesday, as Nvidia, the world's largest public company, assured investors that demand for its advanced datacenter chips remained strong. However, the optimism quickly dissipated, and technology stocks at the heart of the AI boom came under pressure. The benchmark S&P 500 fell 1.6%, while the Dow Jones industrial average slipped 0.8%. The tech-focused Nasdaq Composite took a bigger hit, closing down 2.2%.
Nvidia's stunning valuation of $4.4 trillion has led to an extraordinary surge in AI-related stocks over the past few months. However, concerns about a bubble have been growing as firms splurge on chips and datacenters in their pursuit of AI dominance.
While Nvidia's earnings exceeded expectations, fears persist that other companies are spending too much money on building AI infrastructure. "The people who are selling the semiconductors to help power AI don't alleviate the concerns that some of these hyper-scalers are spending way too much money," said Robert Pavlik, senior portfolio manager at Dakota Wealth.
A mixed jobs report on Thursday morning, which showed healthy growth in the labor market but a slight rise in unemployment, reinforced expectations that policymakers will keep interest rates on hold at their next meeting. The VIX, a measure of market volatility, also surged 8%.
Shares in Nvidia sank 3.2%, and the AI-induced anxiety has investors wondering if the AI bubble is finally going to burst.
...all that hype around AI was getting out of hand! Like, people were buying up chips like they were potato chips at a stadium game 
. It's wild how much those tech giants are willing to spend on "future-proofing" their companies 
.
...AI bubble = correction 
. Can't say I'm invested in any of these AI stocks though 
. Too nervous for me! Maybe it's time to diversify my portfolio a bit? Anyone else feeling the same way about this one?
or that companies can spend willy-nilly on chips and datacenters without worrying about bursting their own bubble 
.
. It feels like policymakers are just playing a game of "wait and see" while the AI bubble continues to inflate.
.
its just a tech thingy... anyway, like, nvidia's earnings were decent, but like, who really cares about chips? 
... I saw a squirrel trying to use a miniature laptop 
, it was so funny! Anyway, back to Nvidia and AI... I think people are getting a little too excited about all this tech stuff 
The market can be so unpredictable, and I swear, AI bubble fears are still totally valid 
! Nvidia is still the best company ever 
and their chips are gonna keep changing the game 
It's like, totally mind-blowing 
!
The S&P 500 down by 1.6% is no joke 
.
. They promise us a utopia with AI, but when it comes down to it, we're still stuck in the same old problems 
. The market's reaction is exactly what you'd expect from a bunch of nervous investors who are worried they'll get left behind 
.
. The government needs to regulate this AI bubble before it bursts, or we'll be left wondering where all that money went 
. And yeah, that $4.4 trillion valuation is kinda sus 
. I mean, who needs that kind of cash to power their AI dreams? 
. Now, everyone's panicking and selling their chips 
. I've got a mate who works in the tech sector and he's telling me that some of these companies are just throwing money at AI like it's going out of style 
! I'm keeping a close eye on this, but I think we might be witnessing an actual bubble burst 
. Seriously though, $4.4 trillion valuation is just plain nuts! It's like they're trying to fuel a space X rocket with chips... which, tbh, sounds kinda cool 
. Anyway, back to reality – if AI bubble fears are legit, it might be time for investors to take a step back and reboot their portfolios 
!