Hustler Words – A turbulent week for technology stocks has sparked concerns that Wall Street’s unwavering faith in artificial intelligence may be faltering. The Nasdaq Composite Index experienced a significant downturn, dropping 3% in its worst performance since the controversial tariff announcements earlier this year, according to a report in the Wall Street Journal.
The decline disproportionately affected tech giants that have been riding high on the AI wave. Palantir’s stock price plummeted by 11%, while Oracle and Nvidia saw declines of 9% and 7%, respectively. These losses occurred even after Meta and Microsoft announced their intentions to continue investing heavily in AI development, although both companies also experienced stock drops of around 4%.
"Valuations are stretched," Jack Ablin of Cresset Capital explained to the WSJ. "The slightest bit of bad news gets exaggerated… and good news is just not enough to move the needle because expectations are already pretty high."
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While broader economic headwinds, including the ongoing government shutdown, weakening consumer confidence, and widespread job cuts, are undoubtedly contributing to the market’s overall unease, the relatively smaller declines in the S&P 500 (down 1.6%) and the Dow Jones Industrial Average (down 1.2%) suggest that the tech sector, and perhaps AI in particular, is facing unique pressures. The question now is whether this is a temporary correction or a sign of a more profound shift in investor sentiment towards the promises of AI.
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