Last month, we shared a story about Seaport Global Securities analyst Jay Goldberg, who defied the odds as the only voice out of 80 Bloomberg stock watchers who rated Nvidia as a “sell.” While Goldberg makes some very good points — mostly, that AI simply isn’t proficient enough, at least yet, to justify its incredible chokehold on the US economy — the consensus on Wall Street has been firmly against him.
Case in point, even after Goldberg made his assessment in the last week of October, investors continued to dump money into Nvidia, which is seen as the “shovel merchant” to the AI goldrush. So much money, in fact, that the company’s market cap briefly shot up above $5 trillion — the first company in history to do so.
All that is to say, conventional wisdom is that you’d be nuts to pull an investment in Nvidia right now. Yet that’s exactly what Japanese investment firm SoftBank did on Tuesday, sending numerous tech stocks into a slide.
According to Bloomberg, SoftBank disclosed it was pulling its $5.8 billion worth of holdings in Nvidia early Tuesday morning, ending its reign as one of the chip giant’s most prominent backers. The news immediately sent shockwaves throughout the market, dragging Nvidia’s stock down by around 2.6 percent as of Tuesday afternoon.
As if to show how codependent the AI industry is, other tech giants were dragged down too, with stock in companies like Tesla falling by 1.8 percent, Meta by 0.95 percent, and Intel around 0.9 percent. Overall, the tech-heavy Nasdaq Index was down by 0.2 percent, while the S&P 500 struggled to maintain a flatline.
Overall, it would be awful news for the AI industry if it wasn’t for one little wrinkle: SoftBank is planning on using its previous Nvidia holdings to back OpenAI, the private company behind ChatGPT. It’s already given OpenAI $7.5 billion, with plans for another $22.5 billion soon, as Bloomberg reports.
In other words, don’t be shocked if the sell-off evens out in the coming days, as Yahoo Finance suggests.
That said, there is at least one lesson to take away from the episode. While most other tech stocks tumbled, Apple soared by over 1.5 percent, its share price reaching an all-time high of $273.53. This is despite a disappointing announcement on Monday that the tech giant was delaying the release of the next iPhone Air in 2026. So what gives?
When you peel back the “big tech” trappings, Apple stands out as the largest tech corporation to maintain ambivalence about the AI boom. Back in June, Apple’s research lab dropped a bombshell paper calling out companies like OpenAI for selling “the illusion of thinking” in AI chatbots.
Apple has increasingly downplayed any efforts at building out a proprietary AI model, after early attempts failed rather spectacularly.
All in all, don’t count on Apple to weather the storm completely if the entire AI…
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