Global stock markets sold off sharply as investors continued to question whether major tech companies have fueled an unsustainable bubble in AI. Nasdaq 100 futures fell 0.36% this morning after losing 2.38% yesterday. The S&P 500 dropped 1.56% and is now down 3% this month and over 5% from its recent high.
Tech and AI Stocks Face Sharp Reversals
According to Fortune, Bank of America summed up market sentiment in a note titled „The bubbly is on ice.“ Nvidia stock rose 5% after its Wednesday earnings call before closing down 3.15% on Thursday. Overnight trading wiped off another 2%. Deutsche Bank called it „a truly remarkable 24 hours, with a sequence of moves that were almost impossible to predict.“
Palantir lost 5.85% yesterday and fell further in premarket trading. SoftBank Group dropped 11% in Japan. Ed Yardeni of Yardeni Research told clients that widespread uncertainty about AI infrastructure spending weighs on the market. Recent reports showed SoftBank and Thiel Macro sold all their Nvidia shares.
Growing Concerns About AI Accuracy
ING analyst Julian Geib noted that leading AI systems generate false claims at a rate of up to 40%. Newer models answer virtually every request instead of refusing queries. This shift from accuracy to fluency poses serious misinformation risks, he said.
Crypto Markets See Steeper Declines
Crypto stocks performed the worst in the selloff. Coinbase fell 7.44% yesterday. Strategy, Michael Saylor’s Bitcoin treasury company, dropped 5%. Both declined further in overnight trading.
Bitcoin itself lost 24% this month alone. The cryptocurrency sat at $82,000 at the time of writing, far below its peak price of $124,000. UBS’s Paul Donovan told clients that Bitcoin’s recent spending power collapse is equivalent to roughly 800% inflation when annualized.
Markets across Asia also declined sharply. Japan’s Nikkei 225 fell 2.4%. China’s CSI 300 dropped 2.44%. South Korea’s KOSPI was down 3.79%. Europe’s STOXX 600 fell 0.8% in early trading.
