Alphabet’s earnings call revealed a possible delay in Gen AI adoption, and a possible Gen AI capex overinvestment.
Thus, the Alphabet earnings report potentially triggered the Gen AI bubble burst.
The S&P 500 could drop by over 50% if the Gen AI bubble burst is followed by a recession, which is what happened during the 2000 dot-com bubble burst.
seekingalpha.com/article/4706536-alphabet-busts-the-gen-ai-bubble
U.S. equities were extra jittery in the past week as investors navigated a sharp selloff in big-tech names and a rotation into small-cap and value stocks. This movement from large to small has been one of the main market trends in July, enough to gain its own nickname — the “Great Rotation.”
Magnificent Seven stocks fell back down to reality and even entered correction territory.