As sharp declines in AI stocks shake markets, experts are advising “be cautious but don’t panic.” The sell-off in technology stocks has particularly hit Asian markets. The Seoul and Tokyo indices are down approximately 5% from their peaks, while Nasdaq futures are down another 0.2% after Tuesday’s 2% drop.
Among the most affected stocks are the AI giants, whose rise made Nvidia the world’s most valuable company. According to experts, the market downturn stems not from a loss of confidence in AI, but from questioning the rapid price increases.
Pictet Asset Management portfolio manager Jon Withaar said, “The sell-off is mainly due to position adjustments; the most successful stocks recently took the hardest hit.” While there is no clear reason for the decline, the triggering effect was the 8% share loss experienced by Palantir Technologies despite its strong results. Nvidia shares also fell 4% on Tuesday.
Barrenjoey manager Angus McGeoch stated that the sell-off was short-term profit-taking, adding, “Fund managers are risk-averse during this period, but we don’t expect a general exit.”
Investors see the rise in markets in recent months, despite high interest rates, inflation, and global trade uncertainties, as “a harbinger of a correction.” However, analysts say this decline is a healthy correction and does not indicate a bubble.
Saxo Bank strategist Charu Chanana said, “Selling like this is necessary for the market to breathe,” while Wilson Asset Management manager Matthew Haupt stated that he saw an opportunity: “I bought today. I hope I’m right.”
