A temporary ceasefire in the Iran conflict has given markets a short break, and some Wall Street strategists are using this moment to send a clear message: it may be time to step back into tech.

Despite ongoing geopolitical risks, analysts believe the recent drop in software and AI stocks has been overdone, creating attractive entry points.

Tech sell-off opens the door

The tech sector has taken a hit in recent weeks. The software ETF (IGV) is down about 12% in one month; meanwhile, the S&P 500 has held relatively steady

Stocks like Palantir dropped 14% in a week, while Palo Alto Networks and Oracle have also seen notable declines. But some investors see this as an opportunity, not a warning sign.

“Time to jump in”

Several strategists argue the market reaction has been too aggressive.

• Some say stocks like Palantir were “thrown out with the bathwater”
• Others highlight Palo Alto Networks as a high-quality name now trading at a discount
• Oracle, despite recent layoffs, is still seen as a key AI and cloud infrastructure player

The common theme: strong fundamentals haven’t changed, only sentiment has.

AI remains the big driver

Even with short-term volatility, AI is still viewed as the main long-term catalyst.

• Nvidia is now trading at more reasonable valuations after pulling back
• Microsoft and Alphabet continue to offer multiple growth paths through AI, cloud, and platforms

While some investors worry that big tech is still expensive, others believe select names are becoming attractive again.

Risks are still there

Strategists are not ignoring the uncertainty. Markets remain sensitive to: geopolitical headlines, ongoing negotiations with Iran, potential escalation risks

As one strategist put it, markets are not done with the conflict, and volatility could return quickly.

This may be a window, not a trend. The ceasefire has created short-term relief, and some investors see it as a chance to buy quality tech at lower prices.

But with risks still high, the approach is clear: Focus on strong companies, not just the dip.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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The post Wall Street Says ‘Buy Tech Stocks Now’ as Iran Ceasefire Eases Pressure first appeared on Finblog.

After a bruising start to the week, US stock futures now suggest some stabilization. But the bigger question remains unresolved: is this just a painful reset, or the start of something much larger?

The question investors always ask too late

Interest in the phrase “AI bubble” has surged recently, especially after market volatility shook investor confidence. Historically, this question is rarely asked at market tops. It usually appears after prices wobble, not before.

And despite the noise, the AI boom has been massive and persistent. Valuations are stretched, capital spending is enormous, and expectations are sky-high. That combination has prompted some of the most respected voices in finance to weigh in, with sharply different conclusions.

The case for a bubble, according to history’s skeptics

Veteran investor Jeremy Grantham and financial historian Edward Chancellor argue that markets are once again displaying classic bubble characteristics. In a recent essay, they compared today’s AI enthusiasm to more than 300 historical market manias.

Their conclusion is blunt: this looks like one of the great bubbles. However, even they concede that the final signs of a major top may not yet be in place.

Grantham, who openly calls himself a “permabear,” has a long track record of spotting excesses early, sometimes painfully early. That nuance matters, because calling a bubble too soon can be just as costly as missing one entirely.

A calmer view: why this may not be a bubble yet

A very different framework comes from economist and fund manager Owen Lamont, who argues that despite frothy conditions, the AI boom does not yet qualify as a true bubble.

Lamont uses what he calls the four horsemen of bubbles:

1. Overvaluation
2. Bubble beliefs and hype
3. Large inflows from investors
4. Equity issuance by insiders

According to him, only three out of four are present today.

Valuations are undeniably high. Investor excitement is everywhere. Retail participation is strong.
But one crucial signal is missing: massive equity issuance.

In past bubbles, corporate insiders rushed to sell shares through IPOs, SPACs, and secondary offerings, effectively handing risk to the public. Today, the opposite is happening. US companies have been buying back nearly $1 trillion in stock, thereby shrinking the public float rather than expanding it.

That behaviour suggests the so-called “smart money” is not yet acting as if prices are unsustainably high.

Big spending does not automatically mean irrationality

Another concern haunting markets is whether the enormous spending on AI infrastructure will ever pay off. Professor Aswath Damodaran takes a pragmatic view.

He argues that many transformative technologies require heavy, uncertain investment upfront. Railroads, oil drilling, and the internet all experienced periods of overbuilding. Some investments failed, but the overall innovation reshaped the economy.

His message is simple: negative returns on some AI projects do not automatically mean the entire sector is a bubble. They may simply reflect the cost of discovering which models and platforms will ultimately win.

Why today still looks different from past crashes

Goldman Sachs strategist Peter Oppenheimer adds another layer of context. Unlike the dotcom era, today’s AI leaders are profitable, cash-rich, and deeply embedded in the global economy. That financial strength gives them far more staying power than many tech firms had in 2000.

That does not guarantee safety. Even cash-rich companies can waste capital. But it reduces the risk of a sudden, system-wide collapse driven by weak balance sheets.

The real warning sign investors should watch

If history is any guide, the moment to worry is not when markets argue about bubbles, but when insiders rush for the exits.

Lamont points to a simple signal: a flood of IPOs from companies eager to sell shares at inflated prices. That phase often brings fraud, speculative listings, and aggressive storytelling aimed at retail investors.

So far, that wave has not fully arrived. But the calendar matters. Reports suggest that 2026 could mark the start of an IPO megacycle, with major private firms preparing to go public. If that happens, the market narrative could shift quickly.

Boom first, bubble later?

For now, the evidence points to an uncomfortable but important conclusion. The AI trade may be overextended in places, volatile, and emotionally charged, but it does not yet display the full anatomy of a historic bubble peak.

That does not mean investors are safe. It means the easy phase of the rally may be over, while the dangerous phase has not yet begun.

In past cycles, the biggest gains often came before the final excess. The biggest losses followed only after everyone agreed there was no risk left at all.

For investors trying to navigate this moment, the real task is not predicting the end, but recognizing the signal when it finally appears.

Resources: WSJ, Fortune

Related: ‘Get Me Out’: AI Fears Trigger a Software Stock Selloff

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

The post Are We in an AI Bubble or Just the Early Innings? first appeared on Finblog.

Standard Chartered’s data says BTC’s correlation with the Nasdaq Composite is around 0.5, and at times soared to 0.8. That’s “tech bro” territory. Meanwhile, its vibe check with gold? Just 0.2. That’s a breakup if we’ve ever seen one.

Their new fantasy portfolio, dubbed the “Mag 7B” (Magnificent 7, but swap Tesla for Bitcoin), outperformed the OG Magnificent 7 by 5% since 2017, delivering an extra 1% annualized return. So, BTC might not be your apocalypse hedge—but it’s playing ball with the big tech boys.

“Bitcoin behaves like a tech stock over shorter horizons,” says Standard Chartered’s head of digital assets, ” says Geoffrey Kendrick. Translation: Institutions are stuffing BTC into growth portfolios, not into doomsday bunkers.

These findings suggest that as institutional adoption of Bitcoin grows, its market behavior increasingly resembles that of traditional tech stocks, prompting investors to reconsider its role within diversified portfolios. Despite this evolving dynamic, some analysts maintain that Bitcoin’s fixed supply and decentralized nature continue to make it a compelling hedge against inflation and currency depreciation. ​

Disclosure: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult with a financial advisor before making investment decisions.

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The post Bitcoin is just another tech stock, not a market hedge, study shows first appeared on Finblog.

The collapse of the dot-com bubble highlights the dangers of irrational exuberance, unsustainable valuations, and the risks of chasing market trends without considering broader macroeconomic fundamentals.

The late 1990s were a time of extraordinary optimism.

The rise of the internet promised to revolutionize industries, and tech companies were at the forefront of this transformation. Investors poured money into dot-com companies, many of which had little more than a business plan and a catchy name. Stock prices skyrocketed, with the Nasdaq Composite Index more than doubling between 1997 and 1999.

However, the euphoria surrounding tech stocks masked serious underlying issues. Many of the companies that went public during this period had little to no revenue, and their business models were often unproven. Despite this, valuations soared, with some companies reaching market capitalizations in the billions of dollars without ever turning a profit.

By March 2000, the bubble began to burst.

Investors, realizing that many of these companies would never be profitable, started selling off their shares. Over the next two years, the Nasdaq plunged by 78%, wiping out trillions of dollars in market value and leaving investors reeling.

The Macro Mistake

The Dot-Com Bubble Burst was a classic case of irrational exuberance, where investors ignored fundamental analysis in favor of chasing the next big thing. The result was a massive misallocation of capital and a devastating collapse when the bubble burst.

• Unsustainable valuations: Many dot-com companies were valued based on hype rather than actual earnings or cash flow. When it became clear that these companies would not live up to their lofty expectations, their stock prices plummeted.
• Chasing trends: Investors flocked to tech stocks because they believed they could not lose. This herd mentality led to a speculative frenzy that drove prices far beyond what was justified by the underlying fundamentals.
• Ignoring macro signals: The broader economy was showing signs of weakness in 2000, but investors were so focused on the tech sector that they failed to notice the warning signs. As a result, they were caught off guard when the bubble burst.

The Macro Lesson

The Dot-Com Bubble Burst offers several critical macroeconomic lessons:

1. Valuation matters: No matter how exciting a sector may be, fundamentals like earnings, cash flow, and profitability remain critical. The dot-com bubble showed us that ignoring these fundamentals can lead to massive losses when reality sets in.
2. Beware of herd mentality: When investors chase trends without considering the underlying risks, it creates bubbles that eventually burst. Staying disciplined and focusing on long-term value is essential for avoiding the pitfalls of speculative markets.
3. Watch for macroeconomic warning signs: The dot-com bubble burst occurred at a time when the broader economy was slowing. As macro investors, it’s important to consider the macro environment when assessing market risks, even if a particular sector is experiencing rapid growth.

The collapse of the dot-com bubble led to a deep bear market, with tech stocks losing nearly 80% of their value. Many companies that had been valued in the billions went bankrupt, and thousands of investors saw their wealth evaporate.

It took several years for the market to recover, and the tech sector remained under pressure for much of the early 2000s.

Investors who remained cautious during the dot-com boom and focused on fundamentals were able to avoid the worst of the collapse.

Additionally, those who recognized the signs of a speculative bubble early on had the opportunity to short overvalued tech stocks, profiting from the market’s eventual decline.

The Dot-Com Bubble Burst serves as a reminder of the dangers of irrational exuberance and the importance of staying disciplined in the face of speculative frenzies.

Source: Macro Mornings

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The post The Dot-com bubble burst: How irrational exuberance led to tech stock collapse first appeared on Finblog.

Key Contributors to the Rally:

• Xiaomi Corp: The smartphone and electronics giant saw its shares rally by 12%, contributing significantly to the index’s gains.
• Lenovo Group: The PC maker experienced a rise of up to 6.2% in its stock value.
• Li Auto: The electric vehicle manufacturer also contributed to the positive momentum in the tech sector.

Impact of DeepSeek:

DeepSeek’s recent advancements in artificial intelligence have been a major catalyst for this rally. The company’s innovative AI models have heightened expectations for the integration of advanced technologies across various industries, leading to increased investments in tech firms poised to benefit from these developments.

Investor Sentiment:

The success of DeepSeek has not only boosted individual stocks but has also enhanced overall investor sentiment towards Chinese technology firms. The Hang Seng Tech Index’s entry into bull market territory reflects this renewed optimism.

Conclusion:

The ascent of Chinese tech stocks into a bull market underscores the significant impact of innovations like DeepSeek. As these companies continue to advance in AI and other technologies, they will likely attract further investor interest, potentially leading to sustained growth in the sector.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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Sources:

• Investing.com
• Bloomberg
• The Wall Street Journal

The post China tech stocks enter bull market: Here’s why and what to expect first appeared on Finblog.

• Broad Declines: The Dow Jones Industrial Average dropped by 0.8%, the S&P 500 by 1.5%, and the Nasdaq Composite by 2.6%, with the Russell 2000 also down by 1.6%.
• Tech Sector Hit Hard: The tech-heavy Nasdaq 100 is experiencing its first five-day losing streak since January, with significant losses in big tech companies like Amazon, Meta, and Nvidia.
• Market Cap Losses: The six most valuable U.S. companies lost a combined $510 billion in market capitalization by midday Friday, with Amazon and Nvidia each shedding over $100 billion.
• Interest Rate Concerns: The sell-off in tech stocks, sensitive to interest rate changes, intensified following hints from Federal Reserve officials that rate cuts might not continue as previously anticipated.
• Healthcare Stocks Dip: Healthcare stocks also declined, exacerbated by President Trump’s appointment of vaccine skeptic Robert F. Kennedy Jr. as secretary of the Department of Health and Human Services.
• Investor Sentiment: While the market remains generally positive about the implications of Trump’s administration, caution is advised by analysts like Bank of America’s Savita Subramanian, who notes overly bullish investor positioning and potential risks from sweeping GOP policy changes.

This shift in market dynamics underscores the complexity of investor sentiment and market reactions to changes in government policy and economic forecasts, highlighting the delicate balance markets must maintain in a rapidly changing political landscape.

The post Big Tech Stocks Suffer $500 Billion Selloff As ‘Dangerously Bullish’ Rally Loses Steam first appeared on Finblog.

• Tech Giants Under Pressure: Both Meta and Microsoft surpassed earnings expectations but alarmed investors with their plans to boost AI spending.
• Indexes Down: The Nasdaq dropped by 2.7% and the S&P 500 fell 1.9%. The Dow also lost 0.9%.
• Broader Impact: The decline affected other tech companies too. Amazon and Apple also saw their shares fall before their earnings reports. Nvidia’s shares dropped over 4.5%.
• Economic Data: New economic data showed higher inflation, affecting Federal Reserve policies. Bond yields, especially the 10-year Treasury, rose sharply.
• Jobs Data: Jobless claims fell to a five-month low. This comes just before Friday’s critical jobs report.

The recent earnings and economic reports have left investors cautious, balancing tech growth against economic pressures.

The post Tech Stocks Dip on Rising AI Spending Fears first appeared on Finblog.

Concerns over overstretched valuations in Big Tech, exacerbated by U.S.-China trade tensions and tepid earnings from Tesla and Alphabet, have fueled market anxiety. The VIX index spiked, signalling increased volatility. Tech stocks, particularly those in the “Magnificent Seven,” are under scrutiny as investors brace for more earnings reports. The drop has also affected commodities and global luxury stocks, with Europe’s luxury giants losing significant value. Amid this turbulence, Bitcoin fell 5% over five days, currently trading around $64,000.

Analysts caution that without solid Q2 results and positive guidance, further profit-taking is likely. The market’s future remains uncertain, with geopolitical risks and economic slowdown adding to the complexity. Investors are now reevaluating their positions, eyeing potential buying opportunities amid the volatility.

The post Market Turmoil: Tech Selloff Sparks Broader Retreat first appeared on Finblog.

Here are some of the biggest premarket U.S. stock movers today:

• Taiwan Semiconductor Manufacturing (NYSE:TSM) stock rose 1.1% after the world’s largest contract chipmaker posted a hefty 36% rise in second-quarter net profit earlier Thursday, riding the surge in demand for semiconductors used in artificial intelligence applications.
• Netflix (NASDAQ:NFLX) stock rose 0.3% ahead of the streaming giant’s quarterly results after the close. It has already guided for lower net subscriber additions in the second quarter than in the year’s first three months.
• DR Horton (NYSE:DHI) stock fell 2.1% after the homebuilder trimmed its full-year revenue outlook, even after it beat estimates for quarterly profit, and also approved a new share buyback authorization totaling $4 billion.
• Domino’s Pizza (NYSE:DPZ) stock slumped 12% after the pizza chain missed estimates for quarterly same-store sales, as inflation worries discouraged U.S. consumers.
• Beyond Meat (NASDAQ:BYND) stock dropped 13% following a report the plant-based meat producer has engaged with bondholders to begin discussions about restructuring its balance sheet.
• Novartis (SIX:NOVN) ADRs fell 2.1% despite the Swiss pharma giant raising its profit guidance, as the Swiss drugmaker reported second-quarter profit and sales ahead of expectations.
• Infosys (NS:INFY) ADRs rose 3.8% after the Indian outsourcing giant reported growing profits and forecast a slight pickup in sales growth for the year.
• Blackstone (NYSE:BX) stock fell 0.8% after the investment firm posted only a modest rise in its second-quarter distributable earnings, with a jump in asset sales in its private equity and credit divisions offsetting a slump in its real estate arm.

The post U.S. Stock Futures Rise as Tech Rebounds, Netflix in Focus first appeared on Finblog.

As Big Tech stocks slump, small caps are gaining momentum. The AI-driven rally that boosted the “Magnificent Seven” stocks has faltered, with semiconductor giant Nvidia (NASDAQ) falling 4.4% and other tech giants also in decline.

Daron Acemoglu of MIT and Jim Covello from Goldman Sachs have raised doubts about AI’s economic impact, suggesting the benefits might be overstated. Acemoglu predicts only a 0.05% annual productivity boost, far less than Goldman Sachs’ forecast of 9%.

The Russell 2000 index of small caps surged, outperforming tech-heavy indices. Investors are re-evaluating their positions, wary of the AI hype. With rising geopolitical tensions and potential U.S.-China trade wars, small caps could continue to outperform.

Increased scrutiny of AI’s value and elevated market expectations could lead to a significant market shift.

The post For stocks, is AI the Emperor’s new clothes?: McGeever first appeared on Finblog.