Market professionals are sounding worried about the artificial intelligence trade after a big week of data points in the technology sector.
Investors are focused on the scale of the AI build-out and whether returns are materializing fast enough to justify it.
The overall stock bull market driven originally by the AI boom remains intact, with the S&P 500 just a few percent off a record. A rotation into non-AI stocks like Procter & Gamble and Berkshire Hathaway have stepped in to support the market. But AI-related shares are already in a bear market or teetering on one.
It may be time to take some profits or hedge your risk.
This week, frontier algorithm maker Anthropic's public filing document didn't contain much information on forthcoming revenues after the company reported a deceleration in sales from the second to the third quarter. At the same time, we learned from the Big Tech earnings reports that hyperscalers are pulling back on their capital expenditures, suggesting they see a terminal level of required computing power at some point in the future.