Global stock markets have fallen sharply amid concerns that a boom in valuations of artificial intelligence (AI) companies could be rapidly cooling.<\/p>\n
Markets in the US, Asia and Europe have fallen after bank bosses warned a serious stock market correction could lie ahead, after a run of record stock market highs led some companies to appear overvalued<\/a>.<\/p>\n In the US, the tech-focused Nasdaq<\/a> and the S&P 500 on Tuesday suffered their largest one-day percentage drop in almost a month.<\/p>\n Technology shares pulled the Nasdaq lower, which resulted in it closing 2% down. Meanwhile, there were one-day falls for all of the \u201cmagnificent seven\u201d AI-related stocks<\/a>, including the chipmaker Nvidia, Amazon, Apple, Microsoft, Tesla, Alphabet (the owner of Google) and Meta (the owner of Facebook, Instagram and WhatsApp).<\/p>\n The S&P also closed down just over 1% as it lost ground because of tech stocks, particularly the data analytics company Palantir<\/a>, which slumped by almost 8% despite having raised its revenue outlook the previous day.<\/p>\n Palantir has also been targeted by a well-known short-seller \u2013 who bets on falls in the value of a company.<\/p>\n The investor Michael Burry \u2013 who rose to prominence after predicting the 2008 financial crash and inspiring the film The Big Short<\/a> \u2013 bet against Palantir and the chipmaker Nvidia, two of the biggest AI companies, sparking criticism from Palantir\u2019s boss and a stock sell-off.<\/p>\n In an interview on CNBC<\/a>, Alex Karp, Palantir\u2019s chief executive, criticised Burry and other short-sellers for \u201ctrying to call the AI revolution into question\u201d.<\/p>\n Asian markets followed the US falls on Wednesday, recording the sharpest slide<\/a> in seven months, as the concerns about tech stocks spread, and indices in Japan and South Korea dropped more than 5% from the record highs reached the previous day. In Europe, markets in the UK, France and Germany dropped slightly on Wednesday morning.<\/p>\n The market falls came as the chief executives of Morgan Stanley and Goldman Sachs cautioned there could be a market correction ahead.<\/p>\n They added their voices to that of Jamie Dimon, the head of the US\u2019s largest bank, JP Morgan Chase, who warned in October<\/a> he was worried markets would crash in the next six months to two years.<\/p>\n Jim Reid, an analyst at Deutsche Bank, said there was a \u201cgrowing chorus discussing whether we might be on the verge of an equity correction\u201d.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Business Today<\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com<\/a> to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n Reid added: \u201cThe last 24 hours have brought a clear risk-off move, as concerns over lofty tech valuations have hit investor sentiment.\u201d<\/p>\n