Artificial intelligence (AI) darling Nvidia on Wednesday surprised Wall Street with accelerating growth after several quarters of slowing sales and a fourth-quarter forecast that exceeded expectations.
While the relief across world stocks was evident on Thursday, even Nvidia’s upbeat results were unlikely to dispel concern around a fall back to earth for highly valued tech stocks, amid lingering concerns about whether AI spending will pay off.
Global stocks have dropped almost 3% this month, set for their biggest monthly fall since March, in part driven by concerns that a rally in tech shares has gone too far, too fast.
“The concerns around tech will persist, and each quarter we are likely to come across the same concerns as markets question the concentration,” said Seema Shah, chief global strategist at Principal Global Investors in London.
“That story won’t go away.”
Shah said that while she was overweight in United States stocks, she was also wary of concentration risks, and this was one reason why she was looking at European shares.
–Reuters–
