Nasdaq Records Sharpest 8-Month Decline in November

The Nasdaq Composite Index has recorded its sharpest decline in eight months this November, slipping 4.3 percent amid heavy selling in major artificial intelligence stocks. The fall also pushed the tech-heavy index behind the S&P 500 for the first time in three months, with the broader benchmark down nearly 2 percent so far this month.

AI Stocks Lead the Sell-Off

A large part of the Nasdaq’s weakness came from declines in sector heavyweights that have powered markets over the past year.

• Nvidia has dropped more than 8 percent in November.

• Meta is down 7 percent.

• Tesla has fallen 11 percent.

• Amazon is lower by about 4 percent.

• Apple has slipped 1 percent.

These declines came despite strong third-quarter earnings, signalling deeper investor concerns about the sustainability of the AI-driven rally.

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Concerns Over AI Bubble Intensify

The retreat follows a series of high-profile moves by major investors:

• Peter Thiel exited his Nvidia position.

• SoftBank’s Masayoshi Son sold his stake.

• Michael Burry, who held over $1 billion in notional Nvidia put options, has deregistered his firm.

The anxiety centres on stretched valuations, fuelled by massive investment in AI infrastructure, data-centre expansion and rapid capital inflows into the sector.

Private markets are seeing similar trends, with a leading AI firm now estimated at $500 billion valuation with $1–1.5 trillion in committed investments. Another AI company, Thinking Machines Lab — founded by former OpenAI executive Mira Murati — is reportedly seeking funds at a $50 billion valuation less than a year after launch.

Valuations Reach Elevated Levels

The growing dominance of AI narratives has pushed S&P 500 valuations to near two standard deviations above long-term averages, making it one of the world’s most expensive markets. Much of the index’s upward earnings revisions this year have come from the “Magnificent Seven,” all major players in the AI ecosystem.

Investors Brace for Busy Week Ahead

The latest market pullback comes before an eventful week of corporate earnings and economic releases.

• Nvidia is set to report earnings on Wednesday, a key moment for gauging sentiment around AI stocks.

• Retail giants Home Depot and Walmart will also declare quarterly results, offering fresh indicators on consumer strength.

Economic data releases will resume following the longest US government shutdown in history, which delayed several key October reports.

• September’s jobs report, due Thursday, will shed light on labour market momentum.

• The Federal Reserve minutes from its October 28–29 meeting may further clarify the divide among policymakers after the most recent quarter-point rate cut.

Last week, traders lowered the probability of another rate cut in December to under 50 per cent after officials indicated that additional easing is not assured.

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