

Is The A.I.-Pocalypse Near For Tech Stocks? | Fred Hickey
12 snips Jun 18, 2024
Tech stock analyst Fred Hickey warns of a possible market breakdown as top 10 stocks dominate S&P 500 gains. He criticizes the lack of ROI from spending on generative A.I. and compares current valuations to historical asset bubbles. Hickey predicts a painful end to the current tech stock situation and advises caution in investing.
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Tech Stock Mania
- Nvidia's $1 trillion market cap increase in one month and Apple's $700 billion surge in six weeks are unsustainable.
- These valuations, driven by FOMO (fear of missing out), resemble past manias like the tulip and South Sea bubbles.
Generative AI's ROI
- Generative AI's demonstrable ROI is questionable, with companies slashing spending after not seeing paybacks.
- Despite real-world AI applications, the current hype around generative AI, fueled by large language models, seems overblown.
Bifurcated Economy
- The US economy's strength is concentrated at the high end, dependent on inflated asset prices.
- A market downturn could trigger a decline in wealth, impacting consumer spending and exacerbating economic weakness.