AI Stocks Lead Market Selloff, but Sevens Report Says “Nothing’s Gone Wrong”
AI Stocks Lead Market Selloff, but Sevens Report Says “Nothing’s Gone Wrong”
Is the entire AI-driven rally suddenly at stake?
The Nasdaq suffered its worst week since April, falling 3% as mega-cap tech and AI-linked names led the decline. But according to Sevens Report Research, “nothing new” has gone wrong with the AI story.
The firm said the pullback reflects investors confronting “the tectonic gap between the amount of money being spent to build out AI capacity…and the paltry amount of revenue that AI is generating.”
That concern was highlighted when Apple reportedly agreed to pay Google only $1 billion to use its Gemini model in an AI-powered Siri — far less than AI bulls had hoped. “It reinforces the view that AI [is] not really being ‘worth’ that much to the end user,” Sevens noted.
Other developments, including Oracle’s heavy AI infrastructure spending and Meta’s post-earnings drop, fueled additional worries.
Still, Sevens emphasized that “nothing has occurred that makes us think the entire AI-driven rally is suddenly at stake.” The firm called the recent weakness a “sobering moment” rather than the start of a collapse, adding that without AI enthusiasm and capital spending, both the market rally and U.S. economic growth “would be much, much smaller.”
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