The end, they say is nigh, and the market is looking awfully nigh-y

(Originally published Nov. 7 in “What in the World“) Is this the beginning of the end?

The stock market has been tumbling all week, with the S&P500 index losing almost 2.5% since its record high Oct. 28.

What’s driving the declines? Growing concerns of a bubble in AI, with investors increasingly bothered by sky-high valuations for Big Tech. The “Shiller PE Ratio” — the cyclically adjusted price-to-earnings ratio— is at its highest since November 1999. Wall Street’s fear gauge, the VIX, jumped 9% on Thursday.

“Big Short” investor Michael Burry, known for his successful bets against the U.S. housing market in 2008, has placed bearish bets on Nvidia and Palantir. Late last month, Burry, in his first X post in more than two years, warned of a bubble, fanning investor concerns over inflated spending in the AI and tech industry. According to FT Alphaville, Alphabet, Amazon, Meta, Microsoft, and Oracle now say they’ll spend roughly $390 billion building the banks of computers — “data centers” — needed to power their growing AI efforts.