Global stock markets saw a sharp decline in early November as fears grew among investors that the artificial intelligence (AI) boom had turned into a speculative bubble. As The Guardian reported, indexes in the US, Asia and Europe plunged after the heads of the world's biggest banks warned of an imminent market correction.
In the US, according to Bloomberg technology-oriented Nasdaq Composite fell two percent on Tuesday - the biggest one-day drop in almost a month. Index S&P 500 lost more than one percent, mainly due to the weakening of technology companies. The company's shares fell significantly Palantir Technologies, which, paradoxically, fell by almost eight percent after the previous increase in the sales outlook. As stated by The Guardian, all titles from the so-called „Big Seven AI“ - thus Nvidia, Amazon, Apple, Microsoft, Tesla, Alphabet (Google) and Meta Platforms (Facebook, Instagram, WhatsApp) - saw a noticeable drop in one day.
Tensions in the markets were boosted by a well-known investor Michael Burry, who became famous for predicting the financial crisis in the year two thousand and eight. As he recalled. Reuters, Burry bet against the stock Nvidia a Palantiru, triggering another wave of sell-offs. CEO Palantiru Alex Karp responded to his move with harsh criticism, saying that short-sellers were trying to „to question the AI revolution itself“.
From Wall Street to Tokyo
According to the Asian markets Reuters on Wednesday, headed in the same direction as the US. Equity indices in Japan a South Korea recorded their biggest declines in seven months, losing over five percent from the previous day's record. Also in Europe, as he stated Financial Times, the mood worsened: the London FTSE 100, Parisian CAC 40 and German DAX weakened slightly in morning trading.
The chiefs also joined the voices of warning Morgan Stanley a Goldman Sachs, who pointed out that the current valuation of stocks - especially technology stocks - is not sustainable in the long term. As he wrote New York Post, their concerns follow on from the October warning Jamie Dimon z JPMorgan Chase, who warned that a significant drop could come in the next six months to two years.
„We see a clear retreat from risky assets in the last twenty-four hours. Fears of overheated valuations of technology companies are worsening investor sentiment,“ said analyst Jim Reid z Deutsche Bank, whom he quoted The Guardian.
The fragile foundations of the AI boom
The growth of AI-related stocks has been staggering over the past two years. But according to Reuters most of the investment is concentrated in a handful of giants, especially Nvidia a OpenAI. Although these companies have become a symbol of technological progress, the return on investment has so far fallen far short of expectations.
Some economists compare the current situation to the dot-com bubble at the turn of the millennium - when the rapid rise of technology stocks ended in a sudden crash. As pointed out by World Economic Forum and quotes Reuters, the global economy is threatened by three „bubbles“: in artificial intelligence, cryptocurrencies and sovereign debt.
Bitcoin under pressure
Cryptocurrencies have also lost money. Bitcoin briefly fell below the threshold for the first time since June a hundred thousand dollars (about two and a half million crowns). In October, it reached an all-time high of over one hundred and twenty-six thousand dollars. As he states CoinMarketCap, 's monthly decline of three full seven-tenths of a percent represented the cryptocurrency's worst performance in a decade.
According to Bloomberg this development suggests that investors are starting to pull out of riskier assets - not just technology stocks, but also cryptocurrencies. Many prefer cash or government bonds, which offer more stable returns at higher interest rates.
Cautious optimism or the beginning of the fall?
Some analysts believe that the current decline is a natural correction after months of rapid growth. Others, however, believe Financial Times warn that this is a signal of a deeper problem: exaggerated expectations about AI may not be sustainable in the long term, and if companies fail to meet optimistic forecasts, the slump could deepen.
The lesson for European and Czech investors is clear - diversify, consider risk and do not panic. Although artificial intelligence remains the key trend of the decade, recent developments are a reminder that even the biggest technological revolution can lose its breath if it is overtaken by speculation.
gnews.cz - GH
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