Remember when AI stocks were basically printing money? Yeah, well, that party might be getting a noise complaint from the neighbors. This week, the market threw some serious shade at the AI darlings, and honestly, it was about time someone asked if we’ve all been drinking a little too much of the artificial intelligence Kool-Aid.
Here’s the tea: Nvidia, Meta, and Palantir all took a beating this week, and it wasn’t because they suddenly forgot how to make computers think. It’s because investors are finally doing some thinking of their own.
1. Michael Burry Woke Up and Chose Violence
You know things are getting spicy when the “Big Short” guy emerges from his two-year social media hibernation to drop cryptic warnings. Michael Burry basically tweeted “Sometimes we see bubbles” and then mic-dropped by betting against Palantir and Nvidia. When the guy who called the 2008 housing crisis starts shorting your favorite AI stocks, maybe it’s time to pay attention?
Sure, Burry’s been crying wolf about market crashes for years, but even a broken clock is right twice a day. And when that clock has a track record of spotting massive bubbles, you might want to check the time.
2. Valuation Reality Check
Here’s the thing nobody wanted to talk about during the AI gold rush: these stocks got expensive. Like, really expensive. We’re talking “your rent in San Francisco” expensive. Goldman Sachs CEO David Solomon basically said “yeah, we’re probably due for a 10-20% correction,” which in Wall Street speak translates to “this is fine” while everything is on fire.
The numbers don’t lie: Palantir dropped 8.35%, Nvidia fell 1.08%, and Meta slid 1.89%. Not exactly crash territory, but enough to make your portfolio feel a little queasy.
3. Palantir’s Earnings Paradox
Here’s where it gets weird: Palantir actually crushed their earnings, beating expectations with $1.18 billion in revenue. Their reward? An 8% stock price haircut. It’s like acing a test and still getting detention because the teacher thinks you’re too cocky.
This is what happens when expectations get so inflated that even good news isn’t good enough. The market basically said, “Cool story, bro, but you’re still overpriced.”
4. Meta’s Money Bonfire
Meta decided to double down on AI spending, planning to throw $70-72 billion at the problem this year. The market’s response? “Maybe slow your roll there, Zuck.” When investors see you burning cash faster than a college freshman with their first credit card, they get nervous.
Look, AI isn’t going anywhere. It’s still revolutionary, still changing everything, and still probably the future. But maybe, just maybe, we don’t need to pay infinite dollars for that future right now. Sometimes the smartest move is to let the hype cool down and buy the dip later.
Your portfolio will thank you for not FOMO-ing into every AI stock at peak euphoria. Trust me on this one.