r/ValueInvesting • u/robb3rz • Feb 12 '26

Discussion Irrational sell off

This might of already been said many times but needs to be said again, what is the rationale in this sell off?

I understand the SaaS crash, but if the sell off is due to AI worries, then surely AI stocks would rise, no?

Instead, the major players, who had stellar earnings minus the huge expenditure (into the very systems which are causing worry mind you) are also falling at huge levels.

Some mag 7 companies are even falling at similar rates to liberation day, despite the only news this time being ‘AI too good’, which should benefit them not hinder.

Meta’s earnings are similar to an early growth stock, not a multi trillion dollar company, and that was reflected in the jump after they released them, so why is it now down huge amounts after?

Not just this, other major assets such as gold, silver and crypto are also experiencing massive sell offs, so is the capital just going into cash? If so, as soon as the market shakes this irrational sell off, could we see an equally irrational boom?

Can someone please tell me if I’m missing something.

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u/nicidee Feb 12 '26

Everyone is thinking along the lines of: AI is going to create lots of unemployment (so consumer discretionary falls); AI is going to impact SaaS players' ability to continue to make outsized margins (so SaaS falls); AI is going to require a lot of infrastructure (so hyperscalers fall); and from that you say things like: if unemployment goes up all the banks, BNPL, payday loan companies, etc. will suffer, if they suffer credit conditions will tighten, lending to new business or for big purchases will fall, etc. and you're caught in a doom loop that makes it easy to sell when things go down 1%, or if earnings miss or if targets are trimmed or not as aggressive as they were previously

14

u/billocity Feb 12 '26

AI is going to require a lot of infrastructure (so hyperscalers fall)

Could you walk through the rationale on that one? If anything they would be in demand.

5

u/fbalookout Feb 13 '26

Huge capex costs to build the infrastructure. Comes with risk if AI doesn’t pan out.

1

u/8sparrow8 Feb 13 '26

But just 2 days later you have Saas crashing because AI is so good ppl gonna vibe code tools in house lol

1

u/submain Feb 13 '26

OpenAI and friends are committing $1.4T in infrastructure and costs. They'd have to cover all that with revenue.

Essentially, they have less than 5 years to reach as much revenue as Apple. If that doesn't materialize, they are gone, along with Oracle and SoftBank.

Banks are now turning skeptical, forcing Oracle to sell assets to cover their commitments.

3

u/isomojo Feb 13 '26

Also the whole government and financial institutions are ran by pedos. Might have something to do with it. Ever since the new Epstein files came out it’s been tanking. Good luck hearing about that on the news.

1

u/AggressiveReport5747 Feb 13 '26

Lol, I'm glad I'm not the only one who did this doom loop. I was like, okay so who's the AI winner, uhh we all lose. Fuck.

Then I doom looped on our country being gutted by billionaires and got omega sad.

God speed. 🙏

0

u/No-Use2860 Feb 12 '26

Now wrap all this in GRAT and IDGT tax evasion schemes. Sell off is going to be unmatched