AI stock market slump

A recent downturn in tech stocks has sparked concerns about investor confidence in artificial intelligence. Several factors contribute to this, including doubts about the sustainability of AI funding and whether companies can justify high valuations with actual profits. Some analysts suggest the AI boom might be a bubble, leading to a market correction.

Companies like Nvidia and Palantir have seen share prices drop, with some investors making significant bets against them. However, other companies like AMD are maintaining confidence from analysts due to strong results and guidance, driven by demand for server CPUs and GPUs. This suggests a more nuanced view where investors are becoming more selective, favouring companies with proven sales and solid financial performance.

Despite the general market uncertainty, some analysts remain optimistic about the long-term growth potential of specific AI-related companies. The situation highlights the ongoing debate about AI's true value and whether current valuations are sustainable.