A trader who inspired The Big Short has bet $1.1 billion against a surge in AI-related stocks, predicting a sharp correction in tech shares. Michael Burry’s move comes after record-high valuations for firms linked to the artificial intelligence industry. Major indexes in Asia fell sharply on Wednesday, with Japan’s Nikkei 225 down 2.5% and South Korea’s Kospi index lower by 2.85%. The AI valuation concerns have investors worried about “AI bubbles” that may be bursting, with tech stocks like Nvidia and Palantir seeing significant drops.
The trader’s warning has been echoed by financial analyst Farhan Badami, who says investors are questioning the sustainability of AI hype and the current earnings run of these companies. With many tech firms heavily invested in AI development, analysts warn that excessive spending may not be justified by the returns. The market correction is expected to continue over the next year, with experts predicting a decline in tech shares as investors reassess their valuations.
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Source: https://www.bbc.com/news/articles/c867vyn2evlo