The recent sell-off in artificial intelligence stocks has sent shockwaves through the tech investment community, erasing months of gains for some of Australias leading technology funds. This dramatic shift has raised questions about the sustainability of the aggressive spending on AI by major players in the industry, especially in light of disappointing forecasts from key companies like Broadcom and Oracle. Investors are grappling with the reality that the high valuations of tech giants may not be justifiable, leading to a cautious reevaluation of their portfolios.

Palantir Technologies has faced a challenging November, witnessing a 16% drop in its stock price, marking its worst month in two years. This decline comes as investors are increasingly wary of high valuations in the AI sector, leading to a broader sell-off of AI stocks. Notably, famed investor Michael Burry has taken a position against Palantir, further fueling concerns about the company’s future in a market that appears to be recalibrating its expectations.