As the stock market rally continues, a concerning trend emerges, signaling potential fragility in the current landscape. Semiconductors, often regarded as the heartbeat of the tech sector, are now the most overbought since March 2000, prompting questions about the sustainability of the rally. What’s even more striking is the perception that the stock market surge has become entirely driven by artificial intelligence (AI).
Companies not related to AI seem to be left out of this rally, highlighting a potential imbalance in market dynamics. Notably, a shift in Fed expectations, which removed two interest rate cuts from futures, failed to impact AI stocks. Key tech giants like Apple ($AAPL), Google ($GOOGL), and Tesla ($TSLA) are all down over 3% today and more than 5% year-to-date, underscoring the market’s reliance on AI-driven stocks.
The once-“Magnificent 7” tech stocks are dwindling, with Nvidia ($NVDA) now surpassing Saudi Aramco in market value, making it the world’s third-most valuable public company after Apple and Microsoft. Super Micro’s meteoric rise, set to be added to the S&P 500, further accentuates the dominance of AI-related firms, marking it as the unofficial best-performing S&P stock of 2024 with a staggering 200% year-to-date gain.
The unsettling question of a potential bubble looms large, evidenced by Goldman Sachs removing $AAPL from its conviction list. Additionally, $TSLA’s China shipments hitting their lowest level in over a year raises eyebrows, signaling potential cracks in the narrative that once overlooked such concerns.
In a market where AI reigns supreme, signs of strain and potential overvaluation are emerging, raising concerns about the sustainability of the current rally.
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Semis most overbought since March 2000. pic.twitter.com/JdnCyEiiaB
— Mac10 (@SuburbanDrone) March 4, 2024
It seems that the stock market rally has become ENTIRELY an AI-based rally.
If your company is not related to AI, it has been left out and this includes many tech companies.
Not even a shift in Fed expectations which has removed 2 interest rate cuts from futures has impacted AI…
— The Kobeissi Letter (@KobeissiLetter) March 4, 2024
Nvidia, $NVDA, has overtaken Saudi Aramco in market value, making the chipmaker the world’s third-most valuable public company after Apple and Microsoft. pic.twitter.com/jQpIj6IpeS
— unusual_whales (@unusual_whales) March 4, 2024
Things are getting spicy with Nvidia skyrocketing again. t.co/IiZpaj2Nth
— Financelot (@FinanceLancelot) March 4, 2024
Super Micro to be added to the S&P 500 making it unofficially the best performing S&P stock of 2024 by a wide margin. Up 200% year to date.
But the real question on the table, is there any sign of a bubble? pic.twitter.com/87izC6CNKj
— Mac10 (@SuburbanDrone) March 4, 2024
Goldman Sachs removing $AAPL from its conviction list.
And $TSLA 's China shipments hit the lowest level in more than a year.
Remember when the market use to care?
— Samantha LaDuc (@SamanthaLaDuc) March 4, 2024
Discussions of layoffs in @Glassdoor reviews have skyrocketed over the last 2 yrs in tech & media. In tech, they're actually higher than even the worst of Covid.
Despite measured layoffs remaining low by historical standards, anxiety about layoffs remains high.
— Daniel Zhao (@DanielBZhao) March 4, 2024
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