CNBC's prominent host: Wall Street is too fixated on some overvalued tech stocks.
CNBC host Jim Cramer pointed out that Wall Street is now too obsessed with the high valuations of some technology stocks and speculative stocks, which he believes is one of the reasons for the general decline in US stocks on Tuesday. Despite Palantir's strong performance, its stock price still fell by nearly 8%, dragging down the overall market performance.
He said: "The bigger issue is that when fund managers are asked if valuations are too high, the first thing they think of is those soaring speculative stocks, or companies in the high-growth AI sector, so they will advise you to stay away from the entire asset class."
On Tuesday, the decline in Palantir and other AI concept stocks led to a general decline in the stock market. The S&P 500 fell by 1.17%, the Dow Jones Industrial Average fell by 0.53%, and the tech-heavy Nasdaq Composite Index plummeted by 2.04%. Palantir's performance exceeded market expectations, its outlook was solid, and it emphasized the growth of its AI business. However, investors are generally concerned that the valuations of tech giants that have been driving the market to new highs are too high.
In Cramer's view, the reasonable approach is that Palantir itself is not the problem, it just needs to "cool off for a while and grow to a level that matches its market value."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
How Ethereum Could Stay Secure Even If Today’s Online Locks Stop Working
Cardano Price Prediction: Can ADA Defend $0.22 as Hoskinson Builds a New Programming Language?
VIPAI Asset Sell-Off and Selective Rotation in Crypto
1. Technology stocks fell sharply as investor interest shifted toward energy and selected defensive assets. From October 10 to 16, the Nasdaq 100 declined 5.49% and the S&P 500 fell 1.95%, while the Dow gained 0.67% and WTI crude rose 10.41%. BTC, ETH, and SOL declined 1.27%, 2.65%, and 4.44%, respectively. This week's technology earnings will be an important test of whether revenue growth, margins, and cash flow can justify current valuations. Better-than-expected results could help stabilize markets in the near term. 2. Crypto continues to see pockets of strong activity, but a broad-based altcoin season has yet to materialize. CoinMarketCap's (CMC) Altcoin Season Index stood at 54 as of the October 18 UTC daily observation, below the altcoin-season threshold of 75, while BTC dominance rose to 60.08%. Our proxy leverage ratio fluctuated between 4.00 and 4.07 during the week, showing no sustained increase and suggesting limited appetite for additional leverage. Meanwhile, as major exchanges expand access to traditional financial assets, the recent sell-off in AI-related equities could attract short-term speculative capital away from crypto. Such capital rotation could make it more difficult for a new altcoin season to take hold. 3. Papertrade's loss-to-mine model has generated significant interest across the crypto community. The protocol combines high-leverage derivatives trading with zero slippage and a mechanism that rewards trading losses with PAPER tokens. Across the eight complete UTC days from October 10 to 17, cumulative reported revenue reached approximately $56.08 million, including $51.90 million distributed to token holders. With growing participation from key opinion leaders (KOLs), Papertrade has reportedly ranked among the top three platforms by profitability in the broader market recently. Assets to watch: BTC, ETH, SOL, ARB, OP, SKHYNIX, SKHY, META, TSLA, LRCX, and SPCX. Key research priorities this week: Cash flow performance in technology earnings; the relative discount and holding costs of the two SK Hynix contracts; and U.S. initial jobless claims and PMI data. Weekly market data cover the period through October 16, while research information was verified through October 18. Observation periods are specified separately for each chart.
Why Bernstein Thinks the AI Stock Sell-Off Could Help Small Caps
Crypto prices
More
