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$1T in tech stocks sold off as market grows skeptical of AI
- blindriver 1y agoIs it a sell off if people buy it right back the same day? This is just anti AI nonsense trying to cause a crash
- nba456_ 1y agoNASDAQ hasn't been this low since 2 weeks ago!
- JKCalhoun 1y agoWhen was the last $1T tech sell-off? That's what people are grousing about.
- epolanski 1y agoWho cares? Volatility is uninteresting.
- cess11 1y agoEh, I like keeping an eye on S&P 500 VIX to get a sense of the current mood among oligarchs and their institutions. I wouldn't use it for investment decisions, however.
- NaomiLehman 1y agoVolatility is where big money is made, ie. retails scalped
- fullshark 1y agoThis narrative that retail is constantly panicking and selling every time the market drops is it based in anything? I'm under the impression the massive volume of buying/selling every day is institutional, and institutional investors/hedge funds are the ones constantly adjusting based on how data moves.
- epolanski 1y agoSecond this. All we know is that over time retail investors tend to underperform the markets, but that's true of sophisticated institutional investors too. Plus: in 2022 when we had a bear year retail was the one buying the dips according to the news.
- Jabbles 1y agoWell according to the FT article that this article is based on: a) it's $800B b) this is the largest such selloff since April https://archive.ph/bzr5G https://archive.ph/bzr5G
- chmod775 1y agoNever. This wasn't such a sell-off either. What actually happened is that market cap declined by that amount, where market cap of course is just latest share price multiplied by shares outstanding. Nobody should be surprised or care that this number fluctuates, which is why certain people try really hard to make it seem more interesting than it really is. Otherwise they'd be out of a job. There is really nothing dumber than finance news.
- expedition32 1y agoThe casino is rigged anyway. While people are standing outside food banks under god emperor Trump the billionaires are making more money than ever. We will never see another 1929 crash in which rich people had to sell off their cars.
- mensetmanusman 1y agohttps://link.springer.com/article/10.1007/s11266-018-0039-2 https://link.springer.com/article/10.1007/s11266-018-0039-2 Do you have this data out to 2025?
- ben_w 1y agoWhy is food bank use in Vancouver, Canada relevant to a complaint about Trump? Sure, Trump wants to add Canada to his kingdom, but unless something wild happened while I was out shopping, still a different country.
- spwa4 1y agoAlso known as mark-to-market. Especially with the cyclical deals with stock at fictional (ie. never sold at that price) valuations, that are now all the rage. Reminds me of Enron, really.
- pllbnk 1y agoWith the pace of inflation we have been witnessing over the past years $1T has become unimpressive. Let's talk percentages. And if somebody wants to talk about absolute numbers, they should talk not only about negatives, but positives too, as in how much the stock market has gained before losing that $1T.
- Ologn 1y agoYes...NVDA closed at $188.15 yesterday, a price it was never at until October. It did hit $212.19 last week, but retreated. After spring 2023, Nvidia stock seems to follow a pattern. It has a run-up prior to earnings, it beats the forecast, with the future forecast replaced with an even more amazing forecast, and then the stock goes down for a bit. It also has runs - it went up in the first half of 2024, as well as from April to now. Who knows how much longer it can go on, but I remember 1999 and things were crazier then. In some ways things were crazier three years ago with FAANG salaries etc. There is a lot of capital spending, the question is are these LLMs with some tweaking worth the capital spending, and it's too early to tell that fully. Of course a big theoretical breakthrough like the utility of deep learning, or transformers or the like would help, but those only come along every few years (if at all).
- nextworddev 1y agoDon’t think faang salaries came down meaningfully
- conorcleary 1y agobuying power has, and usd
- nextworddev 1y agoNah, stocks up more than inflation
- conorcleary 1y agoblow-off top
- conorcleary 11mo agowith cat ears
- JKCalhoun 1y ago"At the heart of the stock stumbles, there appears to be a growing anxiety about the AI business, which is massively expensive to operate and doesn’t appear to be paying off in any concrete way." I wonder if this is a thing the U.S. should be worrying about with regard to China taking the lead. As long as the U.S. is … idling … it seems it could catch up—if in fact there is any there there with AI. But I've been told by Eric Schmidt and others that AGI is just around the corner—by year's end even. Or, it is already being demonstrated in the lab, but we just don't know about it yet.
- gishh 1y agoCatch up to what? LLMs have clearly stalled in terms of advancement, they just kind of sort of get a little bit different at this point. Not even better, just different.
- bubblelicious 1y agoWhere does this view come from? I’m not aware of any real evidence for this. Also consider our data center buildouts in 26 and 27 will be absolutely extraordinary, and scaling is only at the beginning. You have a growing flywheel and plenty of synthetic data to break the data wall
- candiddevmike 1y agoWe need a fundamental paradigm shift beyond transformers. Throwing more compute or data at it isn't pushing the needle.
- bubblelicious 1y agoAnd you don’t think that’s already happening? Also where is your evidence for this?
- bigyabai 1y ago> Also where is your evidence for this? The fact that "scaling laws" didn't scale? Go open your favorite LLM in a hex editor, oftentimes half the larger tensors are just null bytes.
- web3-is-a-scam 1y agoMore.
- HPsquared 1y agoI think everyone saw this coming, only a matter of when. As great as the technology is, it's hard to predict who will profit from it.
- dinobones 1y agoHere’s another idea: We’ve had GPT2 since 2019, almost 6 years now. Even then, OpenAI was claiming it was too dangerous to release or whatever. It’s been 6 years since the path started. We’ve gone from hundreds of thousands -> millions -> billions -> tens of billions -> now possibly trillions in infrastructure cost. But the value created from it has not been proportional along the way. It’s lagging behind by a few orders of magnitude. The biggest value add of AI is that it can now help software engineers write some greenfield code +40% faster, and help people save 30 seconds on a Google search -> reading a website. This is valuable, but it’s not transformational. The value returned has to be a lot higher than that to justify these astronomical infrastructure costs, and I think people are realizing that they’re not materializing and don’t see a path to them materializing.
- coliveira 1y agoUS Ai companies are fixated on low value activities, that's the problem. Creating more garbage for the internet or summarizing text is useful, but not that fantastic or transformative. I have a new version of MS Word where at the start screen it will suggest a bunch of BS topics that it can generate for me. What is the benefit of this other than the appearance that I'm doing real work? Most companies will be inundated by this nonsense created by people who are now 5 to 10 times more "productive" because they use Ai, and corporations will pretty much stop doing any real work.
- stackskipton 1y agoThis already becoming a problem at my company with Gemini. Certain paper pushers are using LLM to fluff up emails so more people have to use LLMs to read them with predictable hallucination on either side resulting in missed deadlines and customer service problems.
- 5350-uiop-1130 1y agoAI was a convenient vessel for shadow QE these last few years Now, with rates falling, they can pivot the story - call it an AI bubble, let it crash then use the crash as justification for renewed, open money printing
- deleted 1y ago[deleted]
- walterbell 1y agoThanks for the pointer (and first HN comment!) on shadow QE. July 2024, https://x.com/stealthqe4/status/1818782094316712148 https://x.com/stealthqe4/status/1818782094316712148 > We’ve all been wondering where all of this liquidity is coming from in the markets. Stealth QE was being done somehow. Now we have the answer! It’s all in the Treasury increased t-bill issuance. QE has now been replaced by ATI. https://hn.algolia.com/?query=%22shadow%20qe%22&type=all https://hn.algolia.com/?query=%22shadow%20qe%22&type=all
- j45 1y agoIsn't there usually a stock sell off roughly every fall?
- skylurk 1y agoWe gotta pay tuition ;)
- rorylawless 1y agoIt seems like AI companies have grown skeptical too. The recent spate of browser releases and OpenAI launching a social network suggests to me that they’ve hit a dead end for now and are falling back on tried and true methods of monetizing.
- natebc 1y agoIt's ads right?
- OptionOfT 1y agoIt has always been. The longer Google can keep you on Google.com the more ads they can serve you.
- natebc 1y agoWell I'm sure Google will be just fine as they've been in the ad business for quite some time but all these hundreds (thousands?) of also-AI companies won't fare very well when they pivot to the selling eyeballs business.
- GreenWatermelon 1y agoThis prospect of this bubble finally popping fills me with great excitement!
- donohoe 1y agoI've had a few people ask how they should shift their 401K mix to avoid the AI bubble. I honestly don't know what to tell them (aside from the fact I am not in any way a financial advisor). Everything seems exposed.
- riffraff 1y agoPut options? Inverse NASDAQ ETFs? Value-oriented funds? Equal weighted funds rather than market cap weighted? I personally just keep investing in cheap total world market funds and let the market do its thing.
- ashleyn 1y agoThe AI bubble is also the same seven companies that have been making all the money for the past decade. The answer is don't worry about it if you're buying S&P 500. Just keep buying, leave it go, and don't touch it. Preferably ever. But realistically don't sell for as long as you can. That applies to any market.
- izacus 1y agoCool, you seem to be forgetting that the purpose of that money is to be spent and available to the investor tho.
- trashface 1y agoResidential real estate trusts? Har har. Could do it now, but wasn't a great idea during the last big (housing) bubble.
- tim333 1y agoUtility stocks and the like? All the stuff that's not in a bubble. Berkshire Hathaway last time was an anti bubble stock - it hit a low on the day the NASDAQ peaked in the dot com bubble.
- lapcat 1y agoThis headline is wildly inaccurate. $1 trillion in tech stocks were not "sold off." Rather, the collective market caps of some tech stocks dropped by $1 trillion. Market cap is mostly a useless number. It's the current stock price multiplied by the number of outstanding shares. But only a small % of shares are bought and sold in a given day, so the current stock price is mostly irrelevant to the shares that aren't moving. If you hold some stock, and the current stock price goes down, but you don't sell your stock, then you haven't lost any actual money. The so-called "value" of your stock may have dropped, but that's just a theoretical value. Unless you're desperate to sell now, you can wait out the downturn in price.
- PessimalDecimal 1y ago> so the current stock price is mostly irrelevant to the shares that aren't moving. If it moves enough, shares that aren't moving might become shares that are though. Unless a company's stock is all held by Die Hard True Believers who will HODL through the apocalypse and beyond, the market price can matter. We'd also have to run the same argument on the upside too. Does the current stock price matter to those who aren't selling when it goes 2x in a year?
- lapcat 1y agoWhat apocalypse, exactly? The stock market has eventually recovered from every "crash." Occasionally a big company crashes and never recovers, e.g., Lehman Brothers, but I wouldn't expect that to happen to Amazon, Meta, Microsoft, or Oracle. I didn't say that stock price is totally irrelevant, but if you're investing for the long term, short-term fluctuations mostly shouldn't change your strategy. In any case, the headline is inaccurate. Unsold stock losing market value is not the same as stock sold off.
- NoahZuniga 1y agoYou can only have a $1T tech stock sell off if $1T of tech stocks are bought.
- dragonwriter 1y agoBased on the body of the article, the headline is using “$X tech selloff” as unintuitive shorthand for “loss of $X of market value in aggregate market capitalization of tech stocks”, not as a reference to trading volume.
- Ekaros 1y agoSo correspondingly there has been trillions in tech buying in past years?
- cs702 1y agoThe OP's headline is not even wrong. Tech stock market capitalization declined by $1T. Every share of stock sold by one party was purchased by another party, as always.
- thaumasiotes 1y agoFor the market capitalization to fall, the price of shares has to fall. For the price of shares to fall, selling pressure in the market has to outweigh buying pressure. The fact that the price dropped is how we know this is a selloff and not a buyoff.
- giorgioz 1y ago"$1 trillion in stock value has been wiped from several of Silicon Valley’s heaviest hitters, all of which are heavily enmeshed in generative AI. Oracle, Meta, Palantir, and Nvidia" I just checked the stock Oracle Palantir and Nvidia and they don't seem particularly down. Only Meta seems down from 750$ to 620$ which is a 21% drop (to the value it had this year in April 2025 (which would be a drop in 277B$ billions dollars). Is there any data supporting the article claims for 1T$ stocks value drop?
- YuukiRey 1y agoAre we looking at different charts? What I see right now on a 5 day view is: - Nvidia -11% - Palantir -16% - Oracle -11% - Meta -5% With some very quick and extremely cursory napkin maths I do get in the 800 billion range, which the original article mentioned. I guess the linked article rounded it up to make it more sensational.
- qoez 1y agoMust be nice writing stock narrative stories. Always new content every day to make up stories about the cause of why stocks go this way or that
- shevy-java 1y agoIt will be written with AI, of course. :) I am also getting annoyed at AI. In the last some days, more and more total garbage AI videos have been swarming youtube. This is a waste of my time, because what I see is no longer real but a fabrication. It never happened.
- afavour 1y agoIf you don’t think we’re due a massive correction after the hype of AI then I don’t know what to tell you. Every sign is right there.
- gregoryhinkle 1y agoI am going to show you a chart: https://i.imgur.com/q7l3lJt.png https://i.imgur.com/q7l3lJt.png This is a weekly chart of Nvidia from 2023 to 2024. During that period, the stock dropped from $95 to $75 in just two weeks. How would you defend the idea that a major correction wouldn’t have happened back in 2023–2024? Would you have expected a correction at that time? After all, given a long enough timescale, corrections are inevitable.
- afavour 1y agoI don’t know how to start a reply to you. Because Nvidia stock dipped for two weeks in the past there’s no chance we’re due a massive correction? Makes so sense whatsoever. Nvidia’s stock price is not the start and end of AI investments. OpenAI is losing over $11bn a quarter. More than they were losing in 2023, and debt accumulates over time. Reality will snap in eventually when investors realize their promised future isn’t coming any time soon. Nvidia’s valuation is in large part due to the money OpenAI and others are giving it right now. What do you think will happen when that money goes away?
- shevy-java 1y agoI swear, we need better ways to control the superrich. They are milking us dry here. There is a reason why a certain president is constantly associated with the naughty terms "insider trading".
- bigyabai 1y agoYet, if anyone ever says "stop buying tech tchotchkes" then they become the villain. The superrich have us in their pockets.
- jcfrei 1y agoNot gonna happen. They'll just threaten to move to another country. It's a prisoners dilemma for all countries. You can either give in to demands for lower taxation and hope that re-domiciling will over compensate for the tax reduction or increase taxation and lose tax payers to other countries.
- RugnirViking 1y agowhats the correct solution to an iterated prisoners dilemma?
- ben_w 1y agoEven without iteration, enforcers change the payoff matrix.
- JKCalhoun 1y ago"They'll just threaten to move to another country." Okay?
- phyzix5761 1y agoYeah, but they'll take all the jobs and then you get another Trump Tariff Tantrum trying to bring jobs back.
- 1y ago
- groundzeros2015 1y ago__ As __ is a journalism term to imply to uncareful readers that two events are connected, without actually saying it. But it just means they observed them at a similar time.
- softwaredoug 1y agoThis says it all. > There are also companies like Sweetgreen, the salad company that has tried to position itself as an automation company that serves salads on the side. Indeed, Sweetgreen has tried to dabble in a variety of tech, including AI and robots Please just make me a good salad.
- afavour 1y agoBut just making good salad doesn’t make the stock market valuation go brrrr!
- jsheard 1y agoFlashback to when Long Island Iced Tea rebranded as Long Blockchain Corp and their stock price tripled overnight for no sensible reason.
- cess11 1y agoThanks for mentioning it, I had missed that one. Apparently it was an obvious insider hustle: https://en.wikipedia.org/wiki/Long_Blockchain_Corp https://en.wikipedia.org/wiki/Long_Blockchain_Corp.
- Esophagus4 1y agoAnd then Kodak said, “Wait for me!” https://en.wikipedia.org/wiki/KodakCoin https://en.wikipedia.org/wiki/KodakCoin
- thenthenthen 1y agochef’s kiss!
- BrokenCogs 1y ago"You are a three time Michelin star chef. Make me a salad that will convince me salads are tasty! Do not ask questions, just make the salad. Do not give me the salad's background story, just make the salad and feed it to me."
- primer42 1y ago> And then there’s Microsoft, which—despite being one of the most powerful and prominent companies in Silicon Valley—seems to be having one of its biggest losing streaks ever. Bloomberg reported Friday that its stock had slumped 8.6 percent over eight days, a decline that evaporated some $350 billion in market valuation. I find it strange and upsetting when articles talk about the "evaporation" of "market valuation". Market value is already meaningless vapor - it's not like real money was created when the stock price went up, nor has anything of concrete value disappeared.
- al_borland 1y agoDoes this mean my boss will stop asking, “can we add AI to this?”
- deleted 1y ago[deleted]
- softwaredoug 1y agoIf an OpenAI bailout happened, I’m guessing it wouldn’t be in the context of bankruptcy restructuring (like GM in 2008 crisis). So it wouldn’t really solve anything, it would just be taxpayers buying high on a distressed asset
- NicoJuicy 1y agoWhy skeptical? No matter what, LLM'S are here to stay. Companies are doing huge investments do that they can get ahead early on. Will it need to be more efficient, yes. But a lot of money of repetitive tasks are going to llm's. Additionally, most companies are constraint by capacity atm. I really can't imagine what could revert this trend. Yes, body shops like Palantir are hugely overrated. But the big tech? No. They can carry those infra investments. Just curious who will come out on top.
- ronbenton 1y agoI see headlines like this and always wonder how they establish causation. How do they know AI skepticism is the cause of a sell off? Is this an assumption or is there reasonable evidence of causation?
- loeg 1y agoThey're guessing. You can sort of paint a story based on which stocks see bigger downturns.
- expedition32 1y agoStock market trading is being done by very smart computers (oh the irony) and nobody knows why those computers do what they do.
- tinyhouse 1y agoEveryone uses AI today for pretty much everything but we're in a bubble... Yeah sure. Big tech with all time revenue and profits, with growing demand for compute quarter after quarter, but we're in a bubble ... Yeah sure. OpenAI loses billions, that's true. That doesn't mean we're in a bubble. They also make billions. If their losses continue, they will keep losing more and more control. Microsoft already owns 30% of OpenAI. Big tech companies have too much cash on their hands and they cannot acquire their competitors, so instead they invest money in them. Either way, it's called consolidation.
- riffraff 1y agoDoes openai make billions? Sam Altman said they have revenue, but didn't say how much, did he? We've heard people saying google is making profit on their Ai offering, but I don't think anyone else has their infrastructure with TPUs etc.
- rvnx 1y agoOpenAI is now late in the game, way behind Claude and even Google Gemini (which used to be very bad, but now great, despite the few hallucinations), so they may collapse under their own weight if they cannot find new investors to feed the monster.
- tinyhouse 1y agoThat's somehow true for enterprise. OpenAI are still leading the consumer side by a large margin over Claude. I'm talking about adoption, not the models. Once they can monetize beyond subscriptions (ads, shopping etc) they will be OK. Most likely once their ads business start growing, they will IPO.
- tinyhouse 1y agoIt's well known that they are doing around $10B in ARR. GCP was losing money for many years but now it's a cash cow. AI is following the same trajectory. Not all companies will sustain it, but that doesn't mean it's a bubble, just that we will see consolidation.
- uyzstvqs 1y agoOriginal: https://www.ft.com/content/8c6e3c18-c5a0-4f60-bac4-fcdab6328bf8 https://www.ft.com/content/8c6e3c18-c5a0-4f60-bac4-fcdab6328... Gizmodo is just regurgitating this Financial Times article into a poor quality opinion piece. Journalism is preferred to someone ranting from an armchair IMO.
- mixxit 1y agoDoes this mean I will stop being greeted by a different ai robot with a whimsical friendly name everytime I log into a new site
- ponector 1y agoHello mixxit! I’m PixelPuff, your cheerful AI companion for today, here to sprinkle a little whimsy while you explore Hacker News. Hope your feed is full of intriguing ideas and clever finds!