is the ai trade losing steam? one fund manager is feeling the heat

2025-05-01 nvidia

Minneapolis, Thursday, 1 May 2025.
Deepwater’s Gene Munster is questioning the strength of the AI trade. Market volatility and a lower risk appetite are to blame. He also points to high spending. Investors are now being forced to question AI investments. Munster’s comments come as the markets face uncertainty. This has led to a more cautious approach to investments. The AI sector, once seen as a sure bet, is now under increased scrutiny. High valuations and potential risks are now in focus.

nvidia’s market position

Nvidia (NVDA:NASDAQ) is facing unusual market volatility, as highlighted by Edward Dowd, who described the trading environment as a “financial twilight zone” [7]. This heightened uncertainty requires investors and traders to be cautious of potential risks [7]. Recent trading days have shown significant price fluctuations and abnormal trading volumes for Nvidia, reflecting the market’s sensitivity to macroeconomic factors and shifts in sentiment [7]. Monitoring Nvidia’s price action for breakout signals and implementing strict risk management strategies is advisable during this period of high volatility [7].

revenue potential and ai’s influence

The AI boom has rekindled global interest in Chinese assets, contributing to increased trading volumes [6]. Hong Kong Exchanges and Clearing Limited (HKEX) CEO Chen Yiting noted that the AI and innovation trend has continued to fuel this interest into 2025 [6]. This surge in trading activity directly impacts revenue potential for companies involved in the AI sector, including Nvidia, whose products are essential for AI development and deployment [GPT]. However, the sustainability of this revenue stream is now being questioned amid market volatility [1].

competitive advantages and risks

Nvidia’s stock volatility has had a ripple effect on AI-related cryptocurrencies [7]. For instance, after Edward Dowd voiced concerns about Nvidia’s market position, the stock experienced a 3.2% drop within an hour on April 30, 2025 [7]. This decline impacted AI cryptocurrencies like Render Token (RNDR) and Fetch.ai (FET), which saw their values decrease by 4.5% and 3.8% respectively during the same period [7]. These fluctuations highlight the interconnectedness of traditional tech stocks and the cryptocurrency market, especially in the AI domain, presenting both risks and opportunities for traders [7].

expert views and trading strategies

Amidst the volatility, technical indicators suggest critical junctures for AI cryptocurrencies [7]. On April 30, 2025, RNDR’s Relative Strength Index (RSI) fell to 38 on the 4-hour chart, indicating an oversold condition [7]. Similarly, FET’s RSI was at 41, also nearing oversold territory [7]. Both RNDR and FET’s MACD indicators showed bearish crossovers, with RNDR signaling a crossover at 11:45 AM (Eastern Time) and FET following at 12:15 PM (Eastern Time) [7]. These indicators suggest that traders should closely monitor Nvidia-related news and market sentiment to identify potential breakout points [7].

Bronnen

Market Volatility AI Trade