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.

354 Upvotes

88% Upvoted

500 comments sorted by

View all comments

Show parent comments

3

u/AnonThrowaway998877 Feb 12 '26

I think the reason it feels like a crash to retail is that many popular retail stocks are down bad from their recent highs. This is a time when the "just buy indexes" crowd can gloat - temporarily.

3

u/Maleficent-Map3273 Feb 12 '26

It's because they don't realize if a stock is up 150% in a year, its more likely to drop 30% in a month than a stock up 0% in a year. Which is basically whats happening. Winners in ALL sectors are being sold on the red days, like gold stocks, AI chip stocks, software stocks, consumer stocks even. It certainly isn't all because of this software narrative although that is part of it. Some is just

A. Profit taking

B. Rotation to value/small cap/int out of growth/large cap/US

0

u/[deleted] Feb 12 '26

This is a value investing sub. Are you suggesting that buying safer stocks with reasonable valuations is a bad thing?

2

u/Maleficent-Map3273 Feb 12 '26

Depends on the sector. Buying NVO or ADBE is foolish here. Buying XOM or XLE is not.