Artificial intelligence could wipe us all out.
uncertain
intelligence → wipe → us
Or it might just kill our unwanted subscriptions.
uncertain
it → kill → subscriptions
Those are the two extremes Wall Street has swung between over the past two weeks, sending hundreds of billions of dollars sloshing out of – and then back into – AI-exposed stocks while fraying the nerves of investors scrambling to keep up.
asserted
Street → swing → investors
“This has been a narrative market and the narrative changes every other week,” said Nancy Tengler, chief executive at Laffer Tengler Investments.
asserted
Tengler → change → Investments
It started on September 12, when Anthropic chief executive Dario Amodei called for a slowdown in development of cutting-edge AI models, which was quickly backed by OpenAI chief executive Sam Altman and SpaceX chief executive Elon Musk.
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which → start → Altman
The moves seemed to validate a series of recent warnings from within the industry about existential risks posed by the technology.
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moves → seem → technology
On the first trading day after Amodei’s essay was published, AI infrastructure stocks tumbled, as investors worried that hitting the brakes on development would mean less spending on computing equipment.
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hitting → publish → equipment
The tech-heavy Nasdaq 100 Index dropped 1.5 per cent between September 14 and 15, erasing more than $US600 billion ($850 billion) in market value.
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Index → drop → value
But those fears vanished last week as excitement about the popularity of Meta Platforms’ Muse personal assistant sent traders rushing back into AI-exposed stocks.
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excitement → vanish → stocks
Meta shares jumped 11 per cent on Monday last week, putting the Facebook and Instagram parent on pace for its best month in more than a decade, after struggling for much of the year amid concerns that heavy spending on AI wouldn’t pay off.
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spending → jump → AI
Intel and Advanced Micro Devices each rallied more than 9 per cent.
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Intel → rally → ?
The Philadelphia Stock Exchange Semiconductor Index, known by its ticker SOX, gained 6 per cent on Monday and Tuesday last week, helping to push the Nasdaq 100 to its first record since early June.
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Index → know → June
It also triggered sell-offs in the shares of companies that rely on recurring bills and negotiable pricing as AI agents are expected to improve at tasks such as price comparison, trip bookings and customer service interactions.
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agents → trigger → comparison
Insurer Allstate fell 8.9 per cent for the week, while cable-provider Charter Communications sank 12 per cent and Planet Fitness, 14 per cent.
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Communications → fall → cent
Still, by the end of the week, $US3 trillion had been added to the Nasdaq 100 since the September 15 low.
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trillion → add → low
“The moves are staggering in both directions,” said Rhys Williams, chief strategist at Wayve Capital Management.
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Williams → say → Management
“It’s hard to explain from a fundamental point of view.”
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It → ’ → view
Of course, rapid changes in sentiment are nothing new in this market, which has been propelled higher by AI for nearly four years.
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which → propel → years
In early 2025, fears about a pullback in spending sparked by a DeepSeek AI model, developed on the cheap in China, caused semiconductor stocks to plunge.
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stocks → spark → China
Nvidia, which dominates the market for AI chips, dropped 17 per cent in a single day.
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which → dominate → day
those fears proved to be misplaced, AI has only got more important for the market and the economy, with spending from tech giants and AI start-ups ballooning.
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spending → prove → giants
And that’s giving investors itchy trigger fingers, especially when it comes to AI disruption.
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it → give → disruption
The Muse-driven sell-off had echoes of earlier this year when releases of AI tools from Anthropic sent shares in a broad range of industries tumbling, from software-as-a-service companies to asset managers.
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shares → drive → managers
But when it comes to AI spending, investors are grappling with other risks in addition to safety.
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investors → come → safety
Interest rates are soaring, making the cost of AI development more expensive.
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cost → soar → development
Fears about that flow of money slowing down have been most apparent in semiconductor stocks.
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flow → slow → stocks
After doubling from the start of the year through June 22, the SOX tumbled 29 per cent to a July 29 low.
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SOX → double → low
While the index has staged a rebound, it remains down 13 per cent from the June peak.
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it → stag → peak
The sell-off has knocked a lot of the froth out of stock prices, leaving many of the companies poised for more gains, according to JoAnne Feeney, a portfolio manager at Advisors Capital Management.
uncertain
off → knock → Management
“You don’t have to believe that this pace of growth is going to continue for five years in order to own companies like Nvidia or Broadcom and some of the others because their valuations have really come in,” said Feeney, whose firm holds shares of both companies.
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firm → have → companies
“We may very well be positioned for renewed interest in the key contributors to the AI infrastructure build-out.”
uncertain
We → position → out
Nvidia shares recently hit their cheapest valuation in more than a decade.
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shares → hit → decade
At less than 17 times profit expected over the next 12 months, the stock’s multiple is half what it commanded in 2025, according to data compiled by Bloomberg.
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commanded → expect → Bloomberg
Other investors are taking a more cautious approach.
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investors → take → approach
Daniel Pilling, a portfolio manager at Sands Capital, still sees plenty of risk in the AI trade, particularly because no one knows what’s in store for the technology.
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what → see → technology
“We manage it with a lot of humility in terms of what we can do and what we know,” said Pilling.
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Pilling → manage → what
“But net-net I would actually still say that maybe there’s a sense of AI concern, I suppose, rather than sort of that bullishness that we had in May and June.”
uncertain
we → say → May
Such scepticism is plentiful and a sign that the market remains healthy, according to Tengler.
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market → remain → Tengler
“What you don’t want is euphoria, which is what we had at the end of the ’90s,” she said, referring to the dotcom bubble.
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she → want → bubble
Investors will get the latest read on the outlook for AI spending this week when memory chip maker Micron Technology reports earnings on Wednesday after US markets close [early Thursday AEST].
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markets → get → Wednesday
…and 4 more, not listed.
The Aporia
