- Steve Eisman sold his stake in Alphabet, reducing exposure to artificial intelligence, and warned that investors may be underestimating the risks if the AI boom fails to deliver on lofty expectations.
- SpaceX shares fell for a third straight session, wiping out more than $600 billion in market value as investors reacted to the company’s first investment-grade bond sale and growing concerns over the cost of its artificial-intelligence expansion.
- Morgan Stanley analysts suggest that if SpaceX's stock hits $100, it would imply zero value for its AI segment.
- Eisman stated, "I've lightened up. I sold my Google a couple of months ago," indicating his desire to reduce his exposure to AI.
- Eisman expressed concern that investors are overly concentrated in a single theme, stating, "It's all one trade," and that many believe they are diversified when they are not.
- Eisman warned, "I think we have a big correction" if AI does not succeed, highlighting his concerns about the market.
- The stock dropped 16% to $154.60, its lowest close since the first day of trading.
- The stock is down 23% over three sessions, with more than $600 billion in market value erased.
- SpaceX is seeking to raise at least $20 billion from its first bond offering.
- Even after the selloff, SpaceX remains one of the world’s largest public companies, with a market capitalization just above $2 trillion.
- SpaceX shares have fallen significantly, nearing a valuation that ignores its artificial intelligence business.
- Morgan Stanley analysts have a $300 price target on SpaceX’s stock, with more than 50% ascribed to the company’s AI segment.
- The selloff in shares has driven the stock near a level that would imply investors are assigning no value to its artificial intelligence business.
- At $100, investors are pricing in zero or even negative value from its AI segment.
- Jonas noted that most investors significantly discount Grok & Cursor and ascribe zero or even negative value for AI due to high capex requirements.
- Despite the selloff, nearly 80% of analysts covering SpaceX recommend buying shares.
Steve Eisman, known for his role in "The Big Short," has reduced his investment in AI by selling his long-held stake in Alphabet. He expressed concerns that investors might be underestimating the risks associated with the AI boom, especially after Alphabet's stock dropped nearly 8% following a capital spending forecast increase.145678
"I've lightened up. I sold my Google a couple of months ago," Eisman stated on CNBC's "Squawk Box," emphasizing his desire to reduce AI exposure. He warned that many investors believe they are diversified, but in reality, their portfolios are heavily weighted towards tech and AI.
Meanwhile, SpaceX shares have plummeted for three consecutive days, erasing over $600 billion in market value. The stock fell 16% to $154.60, its lowest since its trading debut, and is down 23% over three sessions. Analysts suggest that the selloff reflects growing concerns over the company's AI expansion and its first investment-grade bond sale, which aims to raise at least $20 billion.912
Despite the downturn, SpaceX remains a major player with a market cap above $2 trillion. However, analysts warn that the current stock price implies a valuation that disregards its AI business, with predictions that it could drop to $100 per share when insiders can sell their shares next month. Jonas from Morgan Stanley noted, "Many ascribe zero or even negative value for AI given the high capex requirements and uncertain economics." Still, nearly 80% of analysts recommend buying SpaceX shares, indicating a bullish outlook despite the recent volatility.31314171819
“Eisman cautioned that many investors are overly concentrated in tech, stating, "It's all one trade," and warned of a potential market correction if AI fails. Meanwhile, SpaceX's stock has fallen 23% over three sessions, with analysts noting that a price of $100 would imply zero value for its AI segment.”
CNBC
equiti.com
