04.11.25 - AI Valuations Under Scrutiny

US stock futures dipped after Palantir shares slid yesterday evening in post-market trading. Despite delivering a quarterly sales beat and lifting its full-year outlook, investors reacted to concerns about the company’s lofty valuation. Markets are finally starting to question the pricing of AI-exposed names.

Markets: profit taking

• Global stocks mostly down

• Yields sideways to with the US 10-year yield slightly below 4.1%

• US dollar: up

• Gold: falls below USD 4’000/oz level

• Cryptos: continue to fall with Bitcoin now at USD 103’000

• Volatility: VIX index jumps towards 20

My View: Surprise, surprise? Not really. When sentiment runs this hot, it only takes one spark for investors to start reconsidering the price they are willing to pay. We are entering the phase where narratives get tested and valuations suddenly matter again.

Timing is always the tricky part in speculative environments. There is nothing wrong with taking profits gradually into strength.
Momentum breaks fast when confidence shifts. Selective hedging or adding tactical short exposure can work, too, although this remains a tool for experienced investors only.

Excess liquidity and enthusiasm can stretch bubbles far longer than logic would suggest.
The question is now: is it the beginning of a shift in the momentum or do investors buy the dip as they did during previous short and small market dips.

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