No. of Recommendations: 0
Wendy,
Thanks for turning alphabet soup into something inteligable.
Jeff
No. of Recommendations: 0
Wendy,
Well done. I was way out of date. Thanks.
As I asked at the fool, whose got the beef?
The markets tremor...
What follows is from a Yahoo Spam newsletter I never signed up for that Yahoo and the author want to be shared. This is their calling card to pay for Yahoo finance. I do not.
Sunday, September 07
👋 Good morning! Here's what Brian Sozzi, our Executive Editor, is thinking about this week.
🤖 Why AI stock tremors are ripping through portfolios
I talk to a ton of people each week in my role.
Truthfully, the volume has gotten so large that by Friday, I usually 1) have forgotten my own name, 2) start talking like the people I've talked to, and 3) drive right by my own house on the way back from work.
Not complaining at all, just keeping it real.
The positive to the litany of conversations is that there's often one "comment of the week" that leaves an impression. This week, the comment belongs to C3.ai (AI) founder and executive chair Tom Siebel.
Siebel is an OG in tech. I always enjoy chatting with him — he's blunt and knows his stuff. Makes for great insights (and great interviews).
His company's stock got slammed on Thursday morning after reporting a rough quarter and yanking its full-year outlook. Siebel stepped up to the mic on my Opening Bid morning show — alongside his new CEO, Stephen Ehikian — and dropped this golden nugget:
"In this market out there, where you have companies trading at 100 times revenue, you have companies trading at half-trillion-dollar valuations that lose $10 billion a year, I mean, a lot of these valuations are crazy. Come on, C3.ai is a bargain stock," Siebel said.
I have no clue if C3.ai is a screaming buy after a 55% year-to-date tanking — I hung up my analyst game 10-plus years ago. I do think C3.ai needs to restore investor trust, and that will take the rest of 2025 to sort out. Ehikian, fresh out of working for the Trump administration, has a lot of work to do in a short period of time.
But Siebel's valuation comment is of interest in light of the pressure we are seeing in AI stocks. It all began late last week with Nvidia (NVDA), as investors reassessed the company's quarter and outlook. Shares are down 6% in the past five trading sessions.
The AI selling has persisted this week.
Salesforce (CRM) and Figma (FIG) got drilled on Thursday after their quarterly numbers didn't wow. It's clear the hype on their earnings calls wasn't enough to paper over soft areas of the earnings reports. Growing concern on the Street centers around the pace of AI demand by corporations, given what looks to be a slowing US economy.
The overarching concern is whether valuations have plateaued for a sizable chunk of AI stocks. I fancy they might have, given the sharp negative reactions.
"After the very strong returns, the bar for positive surprises is elevated. This makes the group vulnerable to even a little bit of bad news or simply results that are not good enough relative to high expectations. We are also seeing greater differentiation within tech — so a rising tide doesn’t lift all boats," Truist co-chief investment officer Keith Lerner told me.
"Key drivers of recent tech weakness include: a recent MIT paper questioning artificial intelligence's (AI) near-term productivity impact; OpenAI CEO Sam Altman warning of a bubble in AI; a few recent mixed earnings reports from tech names, though broader trend remains robust; tech's strong balance sheets and low leverage make them less reactive to rate cuts compared to cyclical or capital-intensive sectors," Lerner added.
All of that reads as proceed with caution before buying the AI stock dip.
Tech valuations will be top of mind as I descend on the Goldman Sachs Communacopia tech and media conference in San Francisco next week. I will be live on air from the conference on Monday and Tuesday with a steady drumbeat of big market-moving interviews. So, add this one to your calendar and tune in all day Monday and Tuesday! You can easily watch here, on the Yahoo Finance app, or on all major streaming platforms.
No. of Recommendations: 0
Why is there market risk? I need to esplain as Ricardo asked Lucy.
The Money market funds are going to shift. The MMF is most of the money on the sidelines.
The MMFs are de facto banks. Hypothetically, there can be runs on MMFs.
