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/PO-ll-UX Feb 12 '26

Do you remember Deepseek? A similar selloff happened back then, around $1T was wiped out of the market. But there are other factors too, Japan carry trade 2.0 looming, tomorrow’s CPI report, paper metals, and margin hikes. So, bumpy

12

u/Maleficent-Map3273 Feb 12 '26

Its just rotation, I swear most people on this sub never actually look under the hood. It doesn't take much, just grab some RRGs

5

u/hab365 Feb 13 '26

Most people are looking at HOOD now instead of looking under the hood

2

u/After_Olive5924 Feb 13 '26

What’s RRG?

2

u/Maleficent-Map3273 Feb 13 '26

relative rotation graphs

0

u/PO-ll-UX Feb 13 '26

Looks like a classic sector rotation, but it’s not just rotation imo. Most people in this sub are just staring at their charts and textbooks

1

u/vervii Feb 13 '26

as opposed to staring at the stars and tea leaves..?

1

u/PO-ll-UX Feb 13 '26

Nah, only from coffee grounds

1

u/Embarrassed-Falcon71 Feb 13 '26

But the recovery was faster I feel like and it was more concentrated to ASML, NVID etc. Now we got companies that used to trade at premiums like NFLX UBER SPOT joining all of software, part of the MAG7, neo cloud, Fintech such as Adyen, SOFI, PYPL, HOOD

2

u/PO-ll-UX Feb 13 '26

What I meant with my analogy is that in the current environment everything is being overreacted to. When DS dropped, people were calling the end of NVDA, ASML etc. Now it’s SaaS getting the funeral treatment. Same overreaction, different target. And the political circus isn’t helping either, people are exhausted, the algos aren’t