Is the AI Hype Starting to Deflate?

Market Reaction to Earnings: Despite NVIDIA's strong earnings report, the stock rose initially but closed lower as broader market fears and a sell-off in AI-related stocks took hold, raising concerns about datacenter margins and overinflated expectations.

Cryptocurrency Decline: Bitcoin and Ethereum have experienced significant price drops, with Bitcoin trading at $86,000 (31.9% below its all-time high) and Ethereum at $2,800 (43.5% below its peak), leading to debates among traders about the potential end of the market cycle.

AI Stocks Liquidation: The market saw heavy selling of both high-beta and high-quality AI stocks, indicating a potential liquidation rather than a simple rotation, as investors question the sustainability of the AI bubble amidst declining risk appetite.

Long-term Investment Perspective: Despite the current volatility, long-term investors view the situation as an opportunity for dollar-cost averaging, suggesting that the market may be resetting rather than facing a complete downturn.