"With stocks wobbling in the past week over potential AI valuation worries, investors might have noticed that much of the Magnificent Seven has been increasingly choppy while Apple ( NASDAQ:AAPL) has acted like a steady rock, holding its ground at around $270 per share. While the positive initial post-earnings reaction has faded, I do think that investors have a lot to look forward to as the strong early demand for iPhone 17 translates into something bigger as we head into the holiday season."
"However, it certainly seems to feel like a tug-of-war between the bulls, who believe the AI revolution will change the world, and the bears, like Dr. Michael Burry, who made a big short against two of the bigger names in AI. My guess is that Burry's bearish bets are causing some investors to re-evaluate where they stand at this point in the AI bull market. Such checkpoints, I believe, are never a bad thing."
"For instance, Nvidia ( NASDAQ:NVDA) and Palantir ( NASDAQ:PLTR) have been big winners, and if the AI trade turns on its head, these names could be faster to fold than the rest of the market. Really, that's to be expected for hyper-growth stocks that have betas north of 2.2. After a rough few sessions of the two AI stars, one has to imagine that Burry's big put options are already in the money."
Stocks wobbled last week amid AI valuation concerns while much of the Magnificent Seven became increasingly choppy and Apple held steady near $270 per share. Positive post-earnings momentum for Apple faded, but strong early demand for the iPhone 17 is expected to support holiday-season sales. Expectations for a robust holiday season could boost Apple shares despite growing skepticism around AI spending. The AI trade faces a tug-of-war between bullish optimism and bearish bets, including large shorts by Dr. Michael Burry, prompting investor reevaluation. High-beta AI names like Nvidia and Palantir are particularly vulnerable and have shown sizable declines.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]