1 Trillion dollar wiped out from tech, Binance hacked, what’s next?
Disclaimer: Nothing I say or post should be considered financial advice. Please do your own due diligence before making any investment decisions.
Long and behold, the AI bubble has finally showed signs of popping. $Alphabet(GOOGL)$ endured its worst day in history with 26% drop. $Amazon.com(AMZN)$ was not spared as well, dropping almost 15% post earnings. Even $Microsoft(MSFT)$ has not been spared, albeit a stellar earnings report, it struggled to hold its gains. I have been anticipating this true correction for months, and it has finally arrived.
With such lofty expectations on their shoulders for AI related companies, this is bound to happen. $CoreWeave, Inc.(CRWV)$ and $NEBIUS(NBIS)$ were the first to show signs of crumble, with high debt ratios starting to make investors doubt their future prospects. And this seem to send a ripple effect to the whole AI infrastructure, questioning the true valuation of this ecosystem.
The hacking of Binance on Friday did not help the narrative as well, with cryptocurrency crumbling in response to that fiasco. So with everything that is crumbling, is it a good time to add on positions for your favorite tech stocks? I personally will wait and see because the mid term election is coming up in US on Monday, which traditionally lead to a boost in Healthcare stocks. This boost might put further bearish pressure on tech sector.
I am still long on tech, there is no doubt in the potential of AI and its groundbreaking impact. But I foresee the bears are not done yet, they will need more food before going to hibernate for the winter.[Duh]
@PawsAndProfits - Specialist in combining FA and TA for Options selling and Swing trading.
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