MS NOW invited me on Stephanie Ruhle’s show, Money, Power, Politics, on October 16 to discuss what’s happening with the artificial intelligence boom and where interest rates are heading. AI stocks are having a bad month, with a recent selloff raising fears that a historic bubble is bursting. I have a different interpretation. Here’s the video, followed by some charts and analysis that put the recent selloff into perspective:
Financial news sites have used words like “rout” and “panic” to describe the recent selloff in AI stocks. Hmm, sounds pretty bad. Is it?
The most recent record high in the stock market was on October 6. Since then, tech stocks are down nearly 8%. Semiconductor stocks, which have been the hottest AI trade, are down nearly 13% from the Oct. 6 record. That’s a correction, and it has happened rapidly.
If you put a lot of money into those types of stocks on October 6, well, you’re down a lot in a short period of time. But most people invest over the long term. That picture looks a lot better: