US tech stocks tied to artificial intelligence have slipped in recent weeks amid mounting worries that enthusiasm could fade, reviving comparisons to the dotcom bust. According to the Guardian, investors are weighing signs of slowing momentum against signals from policymakers and tech leaders.
Market slide meets policy signals
The Guardian reports that shares in Nvidia fell by more than 3% this week, while other AI-linked names, including Arm, Oracle and AMD, also lost ground. Earlier, Palantir’s stock plunged almost 10% at the start of the week. The piece notes broader softness in US tech stocks and cautions that negative numbers could become more common before month-end.
Federal Reserve chair Jerome Powell sought to calm nerves in remarks at the Jackson Hole gathering of central bankers, the Guardian writes. He acknowledged concerns about rising inflation while also signaling readiness to support an economy affected by uncertainty, including factors linked to Donald Trump and a global slowdown. With stagflation cited as a prospect, Powell indicated interest rates will fall, potentially easing pressure on indebted companies.
Valuation strains and earnings realities
The Guardian highlights warnings about “insane” valuations from OpenAI’s Sam Altman and cites Swissquote analyst Ipek Ozkardeskaya, who said Altman’s comments may have jolted investors and triggered a pullback in high-flying stocks. It points to a Massachusetts Institute of Technology report showing that 95% of companies investing in generative AI have yet to see financial returns.
Tech’s embedded role and investor stance
Despite the turbulence, the Guardian argues that pulling out of major tech positions would probably be unwise, noting widespread pension fund exposure to firms such as Amazon, Microsoft, Alphabet and Meta. It describes how tools like Microsoft’s Copilot and other AI assistants are becoming embedded in office workflows, taking on low-level tasks. If adoption continues, the piece suggests a potential soft landing for the sector even as more speculative businesses falter.
On valuations, the Guardian cites Palantir’s price-to-earnings ratio north of 500 and Nvidia’s at 56, adding that ratios could recede if share prices better align with likely earnings. The article says these companies are not expected to go bust, even in severe market storms. It also notes political support for AI making deeper inroads into corporate life. The Guardian concludes that, as an investment theme, AI is not going away, regardless of market setbacks.
