The sharp drop is the latest sign of anxiety creeping through Wall Street over how long it will take AI companies to see returns on massive investments.
Maybe not even that. The people who bought at the top might not be the ones who sold. The ones who sold might be long-term investors who are still in the black because of the stock’s huge growth in the last 5 years. Someone who bought the stock exactly a year ago is only down about 1.5%. Someone who bought 5 years ago has almost doubled their money.
All that has really happened is that the collective opinion of all Alphabet shareholders is that the company was overvalued by about 15% compared to what they thought it was a couple of days ago.
The degree to which share price discovery is fundamentally rooted in optimistic speculation, as opposed to any actual evidence… at some point talking about “value” becomes a little weird. “Overvalued by 15%” reads like a chemist doing a titration.
People were more interested in selling than buying yesterday.
Maybe not even that. The people who bought at the top might not be the ones who sold. The ones who sold might be long-term investors who are still in the black because of the stock’s huge growth in the last 5 years. Someone who bought the stock exactly a year ago is only down about 1.5%. Someone who bought 5 years ago has almost doubled their money.
All that has really happened is that the collective opinion of all Alphabet shareholders is that the company was overvalued by about 15% compared to what they thought it was a couple of days ago.
The degree to which share price discovery is fundamentally rooted in optimistic speculation, as opposed to any actual evidence… at some point talking about “value” becomes a little weird. “Overvalued by 15%” reads like a chemist doing a titration.
People were more interested in selling than buying yesterday.