Technology stocks fell on November 7 amid fears of an AI bubble, a further-drawn-out federal government shutdown, and economic data that suggests consumer sentiment has dropped toward record-low levels.
That’s in addition to economic data showing last month’s layoffs hit their highest level for the month of October in 20 years. That report, from global outplacement firm Challenger, Gray & Christmas, also said hiring slowed to its lowest point in 14 years.
Despite strong third-quarter earnings reports, the tech-heavy Nasdaq Composite Index (^IXIC) was down once again, for the second consecutive day, about 1% in afternoon trading on Friday, as Big Tech stocks tumbled, closing out the week as the Index heads toward what could be its worst week since April, when the Trump administration introduced its “Liberation Day tariffs.”
Chip stock Arm Holdings (ARM) was down 4%, Advanced Micro Devices (AMD) fell 3%, and Al chip designer Nvidia (NVDA) was down 1% at the time of this writing in afternoon trading, as investors worry about high valuations and mass layoffs in the name of artificial intelligence. Tesla (TSLA) was also down some 3%.
Among those sounding alarm bells is hedge fund investor Michael Burry, who runs Scion Asset Management, and is betting against both Nvidia and Palantir. According to his Securities and Exchange Commission filings, Scion bought an estimated $187.6 million in puts on Nvidia, and another $912 million on Palantir, as CNN reported. Burry has warned both companies are overvalued. (Burry famously predicted the 2008 housing market collapse, and was made famous by the 2015 film The Big Short.)
Last week Burry posted on X, “Sometimes, we see bubbles. Sometimes, there is something to do about it. Sometimes, the only winning move is not to play,” in what some think is his way of saying there is an AI bubble.
