Investor Daily: Are Tech Stocks Overvalued? & Why is Everything Falling...

In this Market Mondays clip, Ian Dunlap and Troy Millings dive into the current state of the stock market, addressing one of the hottest questions: Is everything overvalued and why are stocks falling? Ian highlights the ongoing correction as prices return to their true value after years of massive gains, reminding us that the last time we saw three consecutive years with over 20% returns was during the dot-com era. There's been a frenzy around AI and tech stocks, with everyone scrambling to “front-run” gains hoping to weather an anticipated downturn in the next few years. Ian weighs in on why hype and overvaluation—especially in stocks like Nvidia, Oracle, Palantir, Bitcoin, and Oscar Health—have created a precarious situation. Troy adds that valuations, while driven by impressive earnings growth, have reached almost uncomfortable heights and can’t keep pace forever. Both discuss the risk of the market depending too much on blockbuster earnings from a single tech giant like Nvidia. Drawing parallels to the way Apple was once the market’s linchpin, they explore what happens when stocks are “priced to perfection”—and why perfection won’t always be enough. Despite the daunting pressure, Troy argues that if any company can shoulder these expectations, Nvidia is uniquely positioned. They break down the shifting landscape of tech, with Apple and Google now seen as the new “bonds”—safe havens expected to deliver steady returns over the next five years. But not all companies will weather the storm: Ian points out how several quantum computing stocks are already down 40% or more, warning investors to brace for possible broader market pullbacks. Whether you’re new to investing or a seasoned trader, this insightful discussion will help you understand the dynamics driving today’s market volatility, the role of AI hype, and why it’s so important to keep a critical eye on valuations and earnings moving forward. *Hashtags:* #MarketMondays #StockMarket #Nvidia #Apple #TechStocks #AI #Investing #Finance #StockMarketCorrection #Overvaluation #WallStreet #Google #Meta #Microsoft #Palantir

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Episode Transcript

Speaker 1 (00:01):
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Speaker 2 (00:43):
Is everything overvalued? And why is everything falling?

Speaker 3 (00:49):
Things are falling because they're coming back to the prices
what they should be. I'll get into it later, but
this is going to be the third year that we
had more than twenty percent return in the market, three
years in a row. Shotty, you brought this up last year, right.

(01:10):
The last time that happened was in the dot com era.

Speaker 2 (01:16):
Ninety eight ninety nine. Two thousand people are front.

Speaker 3 (01:20):
Running the games because they know a corrective measure will
be taken sometime next year, in twenty twenty eight. This
is why Sam is trying to clean up his image
and his kerfuffle that he had last.

Speaker 2 (01:31):
Week with Brad Gersner.

Speaker 3 (01:33):
So that IPO adds it will be okay. But there's
been a lot of overvaluation and over hyped talk about
AI because everyone is trying to squeeze in the games
they need in to get them through the next two
or three years for the downturn that we're going to have, So.

Speaker 2 (01:53):
All we overvalue.

Speaker 3 (01:54):
Yes, we'll talk about Peter Till and the video and
all in the second but the market is run up
a lot and it's just correcting to where it should be,
and people are panicking. And most people are panicking because
they bought at levels where they shouldn't be buying Bitcoin
and video, Oracle, Oscar health, everything was bought at two

(02:16):
high a price. Palenteer as well. And when the front
running ends, people begin to take profits. And as Rashot,
I love when you always say there's nothing wrong with
taking profit. But when you see Buffetts start to ease
into Google for the first time in history on the exit,
Apple and Google are going to be the new bonds.

(02:39):
Apple is projected to give twenty six to thirty percent
return over the next five years. It's five to six
percent a year. That's the new bond market. It's a
haven of safety. The market will ultimately be okay.

Speaker 2 (02:53):
But some of these valuations are absolutely insane and I
for the price.

Speaker 4 (02:58):
Yeah, yeah, I agree. I think yes, some of these companies.

Speaker 1 (03:03):
I see somebody in the chat put Palenteer in terms
of valuations and just I mean it is. It has
run to a place where it almost feels uncomfortable. I
think that the issue is that earnings has kept pace
with this type of growth and at some point that
has to decelerate.

Speaker 4 (03:21):
Right, Like we we'll.

Speaker 1 (03:23):
Talk about this more in the show when we as
we're looking forward to to Wednesday, Like when the market
is priced to perfection, right, perfection.

Speaker 2 (03:31):
Won't be good enough.

Speaker 1 (03:33):
Right, So even you know there's good life that's going
to report and how it can shift the market if
it does well and it has future, God, it still might.

Speaker 2 (03:43):
Not be enough.

Speaker 1 (03:45):
It still might not be enough, and that they will
be dominant and the companies that are around it the
metas of the world. And I know everybody is like,
what about Meta? The Metas will be fine. Microsoft will
be fine, Apple will be fine. But there will be
some others that the rest of you. Here's a safeway
to put it right. If invidious sneezes, some companies will

(04:08):
have pneumonia.

Speaker 2 (04:08):
Y'all will have COVID two point zero.

Speaker 1 (04:11):
COVID twenty right, Like in that type of scenario, In
these type of markets, when all indicators are pointing to
all time highs and you look at the cytixus and
everybody keeps bringing up the dot com bubble, I don't
think a crash is imminent, but I will say the
valuations have gone up pretty substantially to a point where

(04:32):
it's like, all right, we need to take a deeper
look at it.

Speaker 4 (04:35):
But we'll see.

Speaker 1 (04:36):
I mean, we thought something like this could happen this year,
right when we're talking about can earnings keep up to
the valuations? It happened in twenty four, right, which is
why we were over twenty percent. It's happening here and
we're pacing toward another twenty percent year. We'll see what
happens in the first core of twenty six. And that's
why Wednesdays so important when you're talking about in video

(04:58):
You're not just talking about a You're talking about infrastructure,
you're talking about cloud, talking about a lot of different sectors.
What that future guidance looks like into Q one Q
two of twenty twenty six will be very very important
to see how this next year is gonna go.

Speaker 3 (05:15):
This reminds me of the first year shot to Kyrie.
He hit the shot of his step right cool. You
can only go into the game winning back so often.
So I think in video will do well in earnings.
But if the entire market is relying upon blockbuster earnings
for one company for equal way to S and P
funds to do well.

Speaker 2 (05:38):
That's not good. Have we seen this before?

Speaker 3 (05:41):
Yep, twenty twenty two dot com era, we've seen this
a couple of times, even the Max seven.

Speaker 4 (05:51):
Exactly because it feels like four years ago we were
just to Apple. I was he just took the words
right out of my mouth.

Speaker 1 (05:59):
I was like, this is how we used to talk
about Apple, Like Apple fights for us, and we needed
to beat earnings and it's so dominant, we needed to
do that. And even if it's great, it's not great enough.
And now people talk rotation and it's just another Max
seven that's now rotated into that spot. Now it's in video.
And even when when when TiAl says that he's selling
out his positions, he didn't just leave the Max seven out.

(06:21):
He said, we're gonna parking in to other Max sevens. Yeah,
you know what I mean. And so it's just interesting
to see.

Speaker 4 (06:27):
I think it.

Speaker 1 (06:28):
Like I said, I think we both are in agree
and stand in the video is going to have a
great quarter, and Dentss kind of got ahead of it,
hasn't he Right, He said, look, we're talking about we're
talking about five hundred billion.

Speaker 4 (06:39):
This is these are not numbers to sneeze that.

Speaker 3 (06:41):
He wanted to say, I'm not there, Like, yo, don't
don't get this, don't put.

Speaker 1 (06:46):
The category as other little crim Yeah, we are not
the same.

Speaker 4 (06:50):
Five hundred billion is is different.

Speaker 1 (06:52):
That's more than the market cap of market cap of
the I think everything outside of the top thirty companies in.

Speaker 4 (06:58):
The world, this is not the same.

Speaker 3 (07:01):
We got to have an honest conversation though, like there
shouldn't be this much in videos.

Speaker 2 (07:06):
My pick my baby, I love it.

Speaker 3 (07:09):
The entire US economy and stock market cannot be relying
upon one company to deliver blockbuster returns to move up
the GDP and defeat China. There was Apple four years ago,
and even that stress didn't allow Tim Cook to create
what he needed to create fast enough because he had

(07:30):
to wait the world on the shoulders. Mistakes get made
when not only are you leading HQ looking over product line,
but then you have the president saying, hey, I really
need you to hit a home run right now for me.

Speaker 2 (07:44):
It's too much pressure.

Speaker 4 (07:46):
Can they deliver?

Speaker 1 (07:47):
I mean, would you rather have any other company be
in this position? I feel like this is a company
that if there was one that was primed to be
in this position, this is it. The fact that they're
doing this and they don't have China right like, they
don't have that market, which would be part of this.
We'll see a full year of Blackwell coming up. Yeah,

(08:08):
we understand the dominance. We watched all the other hyperscalers
and the Max seven's report before them, which is very
strategic on their part. I looked at the numbers, bro
everybody's cappecs did not go down. Everybody's CAPEX went up,
which talks about the demand and we know where they're shopping.

Speaker 4 (08:26):
And so if there was going to be a company
it would be this one and video.

Speaker 3 (08:30):
Will be fine, Metal will be fine, Microsoft will be fine,
Google Dynasty of an ecosystem, votrying right build community. But
the rest of the market, I'm like, even if we
look at quantum and this is not my moment to say, hey,
to beat up on these stocks. R QQ is down

(08:51):
forty three percent, IONQ is down thirty nine percent, QMCD
is down forty percent, RGTI is down forty six percent.
I'm looking at the rest of the market start to
pull back twenty to twenty five percent for some quality companies.

Speaker 2 (09:08):
That's not a good sign. Erners, what's up?

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