3 weeks ago
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The crash that was widely predicted just last summer hasn’t arrived yet. There was no single day when the AI stock market euphoria buckled, no Lehman moment, no front-page meltdown. Instead, over the better part of a year, Wall Street did something far more methodical—and far more telling: It slowly, deliberately, and almost silently wound down its euphoric investments in AI.
“You know, that’s a really interesting way to put it,” said David Royal, chief investment officer at Thrivent, in a recent interview, when asked if the bubble had already burst and nobody noticed. “I think I agree with that … It came down in a pretty orderly way.”
Royal centered his analysis on Nvidia, the giant that became the face of the AI investment supercycle and yet has seen its stock price stagnate for roughly three quarters even as its earnings continued to grow at a blistering pace. The result: Its forward price-to-earnings multiple has compressed from the low 30s to around 20. That’s not a collapse. That’s a controlled descent. New research from Goldman Sachs’ and Morgan Stanley’s top equity analysts agrees with the emerging pattern in markets: a slow climb-down after the bubble warnings months ago. Read Entire Article
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