AI Rally Fades as OpenAI’s $500B Valuation Fuels Bubble Concerns – Tom Essaye
Sevens Report president says stagflation or fading AI enthusiasm are key risks
Open AI’s Valuation: Sign of AI Confidence or Froth?
The tech sector—especially semiconductors and anything AI-related—caught a solid morning bid yesterday following reports that OpenAI’s latest secondary stock sale valued the company near $500 billion. The $10 billion employee share sale sparked fresh enthusiasm across the AI complex, fueling a wave of early risk-on momentum in big-tech names.
However, the initial surge quickly faded. Key AI leaders like NVDA gave back early gains, and while the SOX (semiconductor index) still finished higher, it closed below its open—suggesting growing reluctance among investors to chase AI stocks at historically rich valuations.
The takeaway: While the OpenAI valuation reinforced confidence in the long-term AI narrative, it also underscores how frothy sentiment has become. If investor expectations begin to recalibrate or AI momentum stalls, the risk of a meaningful profit-taking pullback in tech—and potentially the broader market—is rising.
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