NVIDIA CEO Jensen Huang speaks during the Live Keynote Pregame during the Nvidia GTC (GPU Technology Conference) in Washington, DC, on Oct. 28, 2025. <\/p>\n
Jim Watson | AFP | Getty Images<\/p>\n
The euphoria around artificial intelligence is colliding with the limits of reality, and cracks are emerging.<\/p>\n
Last night, tech giants like AMD smashed expectations<\/a> on AI chip demand, and Palantir reported<\/a> another quarter of strong growth. Yet the Nasdaq fell, revealing Wall Street’s playlist is stuck on one track: AI mania.<\/p>\n Palantir \u2014 the poster child of that obsession \u2014 plunged nearly 8% despite its blowout quarter, while Oracle dropped almost 4%. Even AI darlings Nvidia and Amazon pulled back. <\/p>\n The message? It’s AI or nothing \u2014 and that tunnel vision is flashing warning signs.<\/p>\n Some CEOs are warning of a market correction<\/a>, others of an inevitable mismatch between revenues and the massive capital expenditure <\/a>needed to power AI. One CEO even told CNBC that stocks are in a correction<\/a>, even if the S&P 500 hasn’t reflected it.\u00a0<\/p>\n Perhaps it’s time investors step off the hype train and look at the broader market \u2014 even the strongest empires fall when they start believing their own legend.<\/p>\n What you need to know today<\/p>\n SoftBank market cap drops by about $32 billion. Shares plunged more than 14%<\/a> Wednesday amid a broader drop in Asian AI-linked companies as investors turned wary of stretched valuations in the market’s most crowded trade.<\/p>\n PE industry consolidation.\u00a0“How is it that there are more private equity funds in North America than there are McDonald’s franchises,” said KKR & Co’s co-CEO Joe Bae on Tuesday. PE managers are bracing for a wave of consolidation<\/a> as investors demand higher returns and stronger governance. For reference, there are about 14,000 McDonald’s in the U.S. and 19,000 private equity funds.<\/p>\n Democrats sweep U.S. elections.\u00a0Democrats<\/a> made a clean sweep <\/a>in the three biggest contested elections in the U.S. on Tuesday night, including in New Jersey and Virginia. In New York, self-described democratic socialist Zohran Mamdani<\/a> beat out opponents Andrew Cuomo and\u00a0Republican nominee\u00a0Curtis Sliwa<\/a>.<\/p>\n Asian markets tank.\u00a0Japan’s\u00a0Nikkei 225<\/a> dipped below the 50,000 mark on Wednesday amid a wider decline in Asia markets<\/a> as investors fled AI-related stocks. South Korea’s\u00a0Kospi<\/a> also saw losses of as much as 6.16%, with chip heavyweights Samsung Electronics and SK Hynix posting losses.\u00a0<\/p>\n [PRO] Stocks in correction? CEO of Ritholtz Wealth Management Josh Brown said Tuesday the stock market is going through a correction<\/a>, even if the indexes have yet to reflect it.\u00a0<\/p>\n