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\n Our flagship newsletter breaks down the biggest headlines of the day.\n <\/p>\nMarvell Technologies lost money for five straight years before turning a profit of $2.7 billion in the fiscal year ended in January, thanks to gains in its data center business. The stock has more than tripled so far this year and its P\/E ratio has gone from about 30 at the start of 2026 to near 100. Some data storage companies have seen even more eye-popping gains. Sandisk shares have soared more than 700% year to date and its P\/E ratio stands at 68. <\/p>\n
The current price-to-earnings ratio for the S&P 500 is around 25. <\/p>\n
On Tuesday, investors unloaded at least some of their holdings in these stocks. Sandisk sank 12.2%, while Marvell lost 8.1%.<\/p>\n
The sell-off also took a bite out of exchange-traded funds, or ETFs, that invest heavily in tech stocks. The Invesco QQQ Trust Series ETF was down 2.6%, while iShares Semiconductor ETF slumped 7.1%.<\/p>\n
While some investors may have doubts that companies going full throttle on AI infrastructure spending will ultimately be able to generate profits to justify their investment, it\u2019s likely some of the selling this week may be investors pausing to pocket some of their gains after the stock market\u2019s recent string of all-time highs.<\/p>\n
\u201cWith no clear catalyst driving the move lower, we believe today\u2019s pullback likely reflects profit-taking following a strong rally from the March lows,\u201d said Brock Weimer, an investments strategy analyst at Edward Jones.<\/p>\n
Big Tech gains have powered major stock indexes on record-setting runs this year. Within the S&P 500, the tech sector alone is up nearly 27% just over the last three months and roughly 18% for the year. In Asia, South Korea\u2019s Kospi has nearly doubled so far in 2026.<\/p>\n
Heavy selling on Tuesday triggered a halt in trading in the Kospi, which set the stage for the wave of tech stock selling when trading opened in U.S. markets, Wedbush analyst Dan Ives wrote in a research note Tuesday.<\/p>\n
Overall AI enterprise demand in Asia is \u201cshowing no cracks in the armor, which continue to make us very bullish on owning the tech AI winners over the coming year,\u201d he added.<\/p>\n
Still, tech companies\u2019 race to invest in the expansion of AI infrastructure could ultimately be sowing the seeds of future oversupply, according to Philip Straehl, chief investment officer at Morningstar Wealth.<\/p>\n
\u201cPeriods of elevated capital investment have historically not translated into strong outcomes for investors, leaving us cautious on the outlook,\u201d Straehl wrote in a report last week.<\/p>\n
He expects that the rapid expansion of AI computing power will weigh on pricing, hurting companies\u2019 returns and eventually result in a pullback in investing. Semiconductor companies are \u201cparticularly exposed to this dynamic,\u201d Straehl wrote.<\/p>\n
A supply shortage and rising prices for computer memory has helped stocks like Sandisk rally this year, but the supply and demand dynamic is also likely to spur other companies, like Nvidia, to explore how to get a slice of that market, he noted. <\/p>\n
Straehl suggests that as AI-related companies take up a greater share of major stock indexes, investors may benefit from diversifying into sectors such as healthcare and other areas less dependent on AI expectations.<\/p>\n","protected":false},"excerpt":{"rendered":"Technology companies are spending big to incorporate artificial intelligence into their businesses and to build huge data centers.…\n","protected":false},"author":2,"featured_media":550574,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[261],"tags":[291,4186,21573,289,290,2786,9450,79,39331,65770,3150,18,1647,10847,3334,19,1297,5885,17,159547,83531,3337,15260,5762,778,235885,96263,2731,10848,82,235886,4077],"class_list":["post-550573","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alphabet","tag-amazon-com","tag-artificial-intelligence","tag-artificialintelligence","tag-asia","tag-broadcom-inc","tag-business","tag-dan-ives","tag-data-management-and-storage","tag-edward-jones","tag-eire","tag-elon-musk","tag-financial-markets","tag-general-news","tag-ie","tag-inc","tag-information-technology","tag-ireland","tag-lam-research","tag-lam-research-corp","tag-meta-platforms","tag-micron-technology","tag-microsoft-corp","tag-nvidia-corp","tag-philip-straehl","tag-sandisk-corp","tag-spacex","tag-stocks-and-bonds","tag-technology","tag-the-walt-disney-co","tag-u-s-news"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116801168152828719","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/550573","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=550573"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/550573\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/550574"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=550573"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=550573"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=550573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}