AI bubble worries on the rise as Altman calls valuations ‘insane’

Show notes

The AI trade may hit a reality check. Nasdaq tumbled as Big Tech names sold off sharply — Palantir plunged nearly 10%, Nvidia slid more than 3%, and other AI-linked stocks from Arm to AMD lost ground following a blunt MIT report showing 95% of companies investing in generative AI are yet to see returns, combined with OpenAI’s Sam Altman warning that valuations have become “insane.”
Intel was the surprise winner, boosted by SoftBank’s $2bn stake announcement after weeks of political drama and government intervention. But even that comes with risks, as questions swirl over whether AI investment is a boom… or a bubble about to burst.
Meanwhile, investors are piling into “disaster puts,” sending put skew to a 3-year high, just as Jerome Powell heads to Jackson Hole. Will the Fed soothe markets, or spark a deeper selloff?
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