publication
2025-11-04 22:08
Tuesday's session on the New York Stock Exchange brought a significant sell-off in shares of companies related to generative artificial intelligence. Wall Street is becoming more and more bold in asking whether AI has become a speculative bubble.
The president of HSBC, the eighth largest listed bank in the world, stated that consumers are not ready to pay for solutions offered by artificial intelligence. – These are five-year trends, so the acceleration means that we will start to see real benefits in terms of revenues and a real willingness to pay for them, probably later than investors expect – said HSBC CEO Georges Elhedery at a conference in Hong Kong.
The presidents of Goldman Sachs and Morgan Stanley also expressed similar views. – Valuations in the technology sector are full, said Goldman CEO David Salomon. – We should accept the idea that there will be corrections of 10-15%, added the head of Morgan Stanley, Ted Pick. Let's add to this that in October, Jamie Dimon, the president of JP Morgan Chase, warned against more serious declines on Wall Street.
And it looks like these declines materialized, at least to some extent, on Tuesday. Shares of Nvidia were depreciated by almost 4%, Alphabet by 2.1%, Tesla by 5.2%, Oracle by almost 4%, and Palantir by over 8% despite the presentation of better-than-expected quarterly results. Virtually the entire technology sector, as well as industrial companies, were in decline.
That was enough to send the Nasdaq Coposite down more than 2%, drawing a nasty-looking black candle on the daily chart, called a “shooting star pattern” by technical analysts. This name fits Tuesday's session, during which the AI stars of recent months and quarters fell the most.
– To say that we can have a 10-20% correction in the next 12-24 months is an understatement. Markets have corrections all the time – Thomas Martin, senior manager at GLOBALT, countered banking presidents somewhat maliciously (but not without reason) quoted by Reuters. – It's a good thing that the market has corrections and it doesn't mean that it won't recover from them – added Martin.
Still, near-record high valuations of U.S. stocks combined with the impressive rally of stock indices over the past 7 months have made Wall Street a bit dubious. All the more so because there are many “fundamental” threats: the ongoing shutdown of the federal government, the galloping US public debt, stagnation in the labor market and the weakness of the real economy outside the sector of large technology corporations (because it is investments in data centers that now largely drive the growth of the US GDP).
