From Boom to Gloom: AI Stocks Take Wall Street Down
AI darlings lose shine as Wall Street braces for Powell’s Jackson Hole speech and retail earnings deliver a mixed bag.

Wall Street’s red-hot romance with artificial intelligence stocks is showing its cracks. After months of meteoric gains, Nvidia, Palantir and other AI-driven companies have turned into the heaviest anchors on the U.S. markets. The S&P 500 fell 0.5 percent on Wednesday, logging its fourth consecutive loss, while the Nasdaq tumbled more than 1 percent. The Dow Jones Industrial Average managed to hold relatively steady, down just 30 points. But the clear takeaway was this: the same AI names that fueled Wall Street’s rally are now leading its retreat.
Nvidia and Palantir Under Pressure
Nvidia’s dominance in powering the AI boom is unquestioned, but investors are beginning to question its valuation. The stock dropped another 1.3 percent Wednesday after a 3.5 percent slide the day before. At one point, Nvidia’s losses deepened to nearly 4 percent before paring back, reflecting shaky confidence ahead of next week’s critical earnings report. Palantir, which had more than doubled this year on the AI wave, sank 2.3 percent, extending a brutal two-day loss that wiped nearly 12 percent from its market value.
The pullback reflects growing unease that AI optimism may have gotten ahead of reality. A recent MIT study from the Nanda Initiative suggested most corporations are not yet seeing measurable returns from generative AI projects, underscoring the gap between hype and hard results. UBS Global Wealth Management strategist Ulrike Hoffmann-Burchardi noted that the issue is less about technology’s potential and more about the fact that stock prices surged too far, too fast.
