US 'Flashing the Same Warning Signs,' Wall Street Commentator Warns as China’s AI Stock Crash Wipes Out $480 Billion in Under Four Months
Radhika Anilkumar Nadig 4 days ago
MarketsTechAsiaEquities
China’s AI stock selloff has erased about $480 billion in under four months, fueling warnings that U.S. markets show the same bubble signs.
China’s artificial intelligence stock selloff has erased roughly $480 billion in market value in under four months, fueling warnings that U.S. markets are showing the same signs of a bubble.
China’s AI Stocks Crash
China’s STAR50 index, which tracks its biggest AI and chip companies, has fallen about 40% after trading at nearly 250 times trailing earnings at its peak, according to Reuters and market commentator Bull Theory on X.
The country’s broad blue-chip index CSI 300 is in a bear market, down 20% from its June high, with Chinese stocks losing $3.5 trillion since their May peak.
AI stocks made up 42% of China’s market, according to the commentator, adding that “the first AI bubble has burst.”
MiniMax Group Holdings Ltd. and Zhipu AI have lost a combined $150 billion from their highs, while robot maker Unitree has fallen 50% since its August listing.
The US Flashes Similar Signals
AI-linked stocks account for 49% of the S&P 500’s value, according to JPMorgan, above the 42% share they held of China’s market before its crash.
The Nasdaq 100 has fallen 3.31% over the past month but remains up 16.14% year to date, while the S&P 500 is down 0.09% over the month and up 11.93% this year.
Anthropic has filed for an IPO at a valuation that could reach $2 trillion, despite losing $80.7 billion in the first half of the year. The Wall Street Journal reported it is targeting a debut the week of Nov. 16, raising $100 billion or more.
“The US is now flashing the same warning signs China did before its AI stocks crashed,” Bull Theory said.
🚨 THE FIRST AI BUBBLE HAS BURST.
— Bull Theory (@BullTheoryio) October 26, 2026
China's STAR50 index, which tracks the country's biggest AI and chip companies, has crashed 40% in less than four months.
That has wiped out about $480 billion in market value.
The damage has spread across the whole market.
China's main CSI… pic.twitter.com/LtC6nEcXnU
AI Stocks Under Pressure
U.S. tech stocks have been on a rocky path this month as investors worry about the debt behind AI spending, with Meta Platforms Inc.’s (NASDAQ:META) credit default swaps and CoreWeave Inc.‘s (NASDAQ:CRWV) bond yield hitting record highs.
| ETF | AUM | Avg. Expense Ratio | 1 Month | 3 Months | YTD | 1 Year |
| iShares PHLX SOX Semiconductor Sector Index Fund (NASDAQ:SOXX) | $43.23 billion | 0.33% | +11.23% | -11.26% | +89.02% | +110.14% |
| iShares U.S. Technology ETF (NYSE:IYW) | $24.31 billion | 0.37% | +5.40% | +4.92% | +32.75% | +35.35% |
| Fidelity MSCI Information Technology Index ETF (NYSE:FTEC) | $22.15 billion | 0.08% | +4.41% | +5.09% | +33.92% | +35.54% |
| iShares Expanded Tech Sector ETF (NYSE:IGM) | $10.73 billion | 0.37% | +4.94% | +3.28% | +30.95% | +34.24% |
| iShares Future AI & Tech ETF (NYSE:ARTY) | $3.68 billion | 0.47% | +5.03% | +2.85% | +62.56% | +71.12% |
| Roundhill Generative AI & Technology ETF (NYSE:CHAT) | $1.63 billion | 0.75% | +4.97% | -6.02% | +56.02 | +54.08% |
Price Action: The State Street SPDR S&P 500 ETF Trust (NYSE:SPY) closed 0.71% higher at $765.37 on Monday, while the Invesco QQQ Trust (NASDAQ:QQQ) closed 1.11% at $712.20.
Benzinga Edge rankings indicate the State Street ETF has a Momentum score in the 69th percentile.
See More: Top Value Stocks
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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