Recently, everyone is talking about AI. This irection is really promising and this is the future. But stock prices associated with this direction are already highly inflated. For example, take NVDIA ( NVDA ). Multiplier P/E ~208 (at a rate of 20-30). Multiplier P/S ~ 37 (at a rate of 3-5). Now people don't care that they are buying a business at 10 times the normal value. But it will take a little time and there will be sobering.
Now NVDIA stock is at an all-time high. Beginners love to buy on highs. When someone is buying, someone is selling. And now large funds and insiders are selling the stock for millions of dollars.
The stock is heavily overbought and no longer has much potential for growth, in the coming months it will fall. Now AI is about the growth of Big Tech shares, which have already grown by + 50+70% since the beginning of this year! It's a lot. For example, Apple is generally ~4-5% of its historical maximum 😱
In context of incoming data, we see that conditions in world's economies are destroying, which means that IT sector will not be able to pull market for a long time and will go into correction. Sp500 will also go down accordingly. And this means that the hype around AI will soon cool down ♨️