After the growing enthusiasm over the last few months, the price of some AI-related stocks has started to contract. Has the race come to an end or is this an investment opportunity?
The euphoric mood that has characterized the US stock market in recent weeks appears to be starting to deflate. CNN’s Fear & Greed Index, which measures market sentiment, has fallen again and the share prices of many companies in the Information Technology and Artificial Intelligence sectors are starting to lose ground.
It is a period that requires particular attention, as typical "pump & dump" patterns often occur, and significant price collapses due to a climate of strong indecision. In particular, the attention of traders and investors has once again shifted towards two very promising companies, whose share price, which has grown significantly in recent months, has begun to contract, Adobe (ADBE) and Palantir (PLTR).
What to expect from the US market? Will it just be a contraction?
S&P500, end of the race or just the beginning?
On Friday, the market closed negatively, with the S&P500 recording a price contraction of -0.65%. It represents a first contraction, after a long series of positive sessions that have effectively catalyzed many discussions in the markets. On Monday, the index recovered part of its losses, posting a gain of +0.63%.
The reason lies in an increase in the price volatility of some of the so-called "magnificent 7", large-cap companies, attributed to the Information Technology sector.
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Adobe (ADBE)
Adobe Inc. is an American multinational company that operates in the software sector. Adobe has played a significant role in digital transformation in the design and media production industry. The company leverages AI to improve the user experience, automate workflows, and offer smarter, more advanced tools for creative professionals and companies. For these and other reasons, it has captured strong interest from the stock market public, which has translated into strong capital appreciation in recent years; the return since 2023 has even come close to 100% near the 2024 highs. Over the past week, the stock has lost more than 15% due to lower-than-expected revenue forecasts. Investors were hoping for a greater boost on the fundamental side thanks to the introduction of artificial intelligence solutions. Adobe CEO Shantanu Narayen was tone-deaf in terms of company forecasts, while reported data failed to keep investor sentiment high. However, on Monday the company immediately recorded a strong recovery, equal to +4.35%, showing renewed interest on the part of demand.
Palantir (PLTR)
The company, much discussed in this latest market phase, recorded a first strong contraction in price in Friday’s session. The PLTR stock fell by around 4% at the end of last week, in one of the classic cases of "Sell on News" that often alarm the markets. The stock remains at the center of a long series of positive news, generating a lot of speculation and consequent volatility.
The company could become a prime contractor for the US Army’s Titan program, as announced by Palantir CTO Shyam Sankar, who said: "It’s another manifestation of how AI is changing the face of Of the war". This is a very strong statement, especially considering recent global geopolitical complications.
This fervor has helped PLTR shares hold up in the face of recent profit-taking, and on Monday the company closed another positive session, equal to +2.17%.
Original article published on Money.it Italy 2024-03-19 11:35:23. Original title: Queste 2 azioni in tema AI stanno crollando. Occasione da non perdere?
