Tech stocks sold off on Tuesday, with chipmaker Nvidia (NVDA) closing the session 3.5% in the red, and hovered just below the flatline in pre-market trading on Wednesday.
The US tech-focused Nasdaq (^IXIC) ended Tuesday's session down around 1.5%, and futures linked to the index (NQ=F) were down 0.3% at the time of writing.
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The fall in tech stocks came after a report by the Massachusetts Institute of Technology's Nanda initiative said that “95% of organisations are getting zero return” from their investments in generative artificial intelligence (AI).
The sell-off also followed a report by The Verge on Friday which said OpenAI CEO Sam Altman had pointed to an AI bubble.
Data software platform provider Palantir (PLTR) slid more than 9% on Tuesday, and was down a further 1.4% in pre-market trading on Wednesday.
The fall on Tuesday marked a fifth straight losing session for Palantir shares. However, the stock is still up nearly 109% year-to-date, having risen more than 150% from its April low thanks to its second quarter earnings report, which saw the company's revenue top $1bn in a single quarter for the first time.
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Steve Clayton, head of equity funds at Hargreaves Lansdown, said the fall in Palantir shares came as “investors questioned whether a valuation of over $400bn could be justified by a business which last year generated less than $3bn of revenues”.
The stock also came under pressure after a bearish report by short seller Citron Research published on Monday predicted a price target of $40. The firm's founder, Andrew Left, called the target “generous.”
Cloud technology company Oracle (ORCL) was another company in the sector that fell on Tuesday, sliding 5.8% and lingering just below the flatline in pre-market trading on Wednesday morning.
It followed a Bloomberg report on Monday which said Oracle's longtime chief security officer Mary Ann Davidson was leaving the company as part of a recent reorganisation.
A spokesperson for Oracle had not responded to Yahoo Finance UK's request for comment at the time of writing.
Cryptocurrency-related stocks fell on Tuesday, as the price of bitcoin (BTC-USD) declined after hitting a fresh high last week.
Bitcoin hit a record $124,000 last week, but has since fallen back, dipping 3% over the past five days.
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