New York: Stock markets across the world, including tech-focused Nasdaq and S&P, fell on fears of a stock market bubble reminiscent of the dotcom boom in the 1990s. The growing excitement over AI has raised worries that many stocks have been overvalued, especially with leading AI stocks Nvidia and Palantir dropping by 4% and 8% overnight, despite stronger corporate balance sheets.
“There is fear of an AI correction, and if it comes, it will sweep the rest of the market with it due to the heavy weight of the leading names,” market veteran Louis Navellier said in an interaction with CNBC.
Leading Asian exchanges, including Japan’s Nikkei 225 and South Korea’s Kospi, fell 2.5% and 2% respectively, with technology heavyweights like Japan’s SoftBank Group plunging 10% and Korean chip heavyweight Samsung Electronics down 4% at the end of the trading session on November 5.
New York-based Nasdaq was down 2%, especially as AI-related stocks like Nvidia, Apple, Microsoft, Tesla, Meta (Facebook’s parent), and Alphabet (Google’s parent) witnessed a decline in valuations. S&P has also seen its value plunge 1%, its largest percentage decline in a month.
Hedge fund manager Michael Burry, well known for predicting the 2008 housing crash, has started to bet against Nvidia and data analysis company Palantir through put options, prompting wide-ranging discussions online.
Why Dr. Michael Burry is bearish on $NVDA and $PLTR?
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Analysts have been predicting a stock market correction for quite some time now, with the CEO’s of Morgan Stanley and Goldman Sachs cautioning of a market correction. Is this market fall a sign of ominous days ahead? The jury’s out there, even as some, like Michael Burry, continue to cash in on the opportunity.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers should conduct their own research or consult with a qualified financial advisor before making any investment decisions.
