Breaking: Mayhem in the Market 🫧

The Generative AI bubble may finally have popped.

TL;DR

The author's previous prediction about a market split between chipmakers/neocloud and big tech companies was initially met with criticism.
Yesterday, the market showed a mixed reaction, with neocloud companies like CoreWeave falling while Amazon, Apple, and Google rose.
Theories for yesterday's mixed reaction included rotation out of smaller companies into larger ones, or the belief that hyperscalers would reduce capital expenditures due to public resistance to data centers.
Today's market is described as a 'slaughter,' with almost no companies exempt from declines.

I am old enough to remember when I posted this yesterday on X and got a huge amount of shit for it, from Sabine Hossenfelder and a slew of bots and tech bros:

And, yesterday, after I posted it, the market was actually mixed, split hard between chipmakers and neocloud companies like CoreWeave that got hit hard (much as I anticipated), and big companies like Amazon, Apple, and Google that didn’t, and instead got a bounce.

One theory was that people were rotating out of the smaller neocloud companies, and into the bigger tech companies that could better weather the cash crunch:

Another similar theory was the hyperscalers were up because (in light of the public resistance to data centers which came clear on Tuesday) investors thought that the hyperscalers might finally settle down on their wild CapEx expenditures:

Today looks pretty different. It’s a slaughter. Almost no company is exempt.