Investors have seen a strong bull market continue in 2026 after an already strong 2025. But the week of June 5 saw the Nasdaq post its worst drop in over a year (since April-2025). The pain was partly drive by a stronger jobs report fueling rate hike fears, and partly after AI-chip related guidance out of Broadcom Inc. (NASDAQ: AVGO). The carnage was far more than just one company though — now some investors are questioning whether or not this is the start of a massive valuation bubble bursting.
Oggonomics looked at the key equity market losers from last week, and has decided to look at other past bubbles to see if this is really the start of a bubble bursting. There may be some classic signs of a bubble, but there are also many points that might not be a bubble. The timing of last week’s selling frenzy is also crucial with SpaceX set to IPO in the coming days, and with the true AI leaders like Anthropic and OpenAI expected to be the next mega-cap IPOs in the coming months.
Bubbles are actually hard to predict when they will burst. Very hard, and potentially very painful. Calling the top of any market has wrecked many careers. The so-called “expert” market-timers who bet against bubbles on a live basis can go bankrupt several times over before the actual bubbles burst. One of the Oggonomics’ mantras should always be considered by investors (in a bubble or not) — Always a bull, you’re a fool! Always a bear, you’re broke!
So, did we just witness the popping of a major bubble in the sectors tied to Chips, AI, Quantum, Crypto? There are many offshoots as well, like companies tied to power providers, precious metals and rare earth materials. In the end, let’s stock to the chip giants, quantum computing and also crypto for this review. The AI software and AI platforms themselves will have to wait for a “bubble analysis” because we haven’t even seen the pre-IPO data from Anthropic and OpenAI.
The worries of a bubble (or bubbles) are critical for upcoming IPOs from SpaceX, Anthropic and OpenAI. These companies have all raised billions and billions in private cash just to get to this point. They will also require billions and billions of dollars in the future. Those same IPOs will also require additional investor capital just to hold their IPO prices after the stocks are public as many insiders and early backers will likely cash out to some extent. And if everyone sells to lock in their profits or to protect against losses, market dynamics of supply and demand would imply that their share prices should go lower.
The good news is that there should not be bubbles everywhere. On the other hand, some recent bubbles may have burst already. There is also a history of other bubbles that can offer insight to the current situation.
MASSIVE SEMICONDUCTOR GROWTH MEETS VALUATION
The semiconductor sector led the market’s fall last week. The good news is that all of these stocks are actually real business, and they all have a long history of earnings growth. But the bad news is that some had rallied so much their valuations look priced for perfection as the valuations had soared to significantly higher levels than the past.
Broadcom Inc. (NASDAQ: AVGO) fell 7.9% to $385.73 on Friday after a recent all, time — and it now sits at -22% from that fresh high. Its most recent guidance was disappointing to some, and it led to a $1 trillion loss in value across the chip sector last week. Many analysts still raised their price targets (see below) after the report, and the consensus analyst price target is now over $515 after those price target hikes.
NVIDIA Corporation (NASDAQ:NVDA) is the king of AI chips and fell by 6.2% to $205.10 on Friday. With a $4.9 trillion market cap, even a 5% correction signals $225 billion in lost market value from current levels. NVIDIA is now down 13.3% from its recent all-time high. NVIDIA is at the forefront of all AI-chip stocks. It has also become a posterchild for circular financing deals by investing in companies that are then going to use the capital to finance their AI growth ambitions — with funds often being committed to buying NVIDIA’s AI chips for years into the future.
Micron Technology Inc. (NASDAQ: MU) fell 13% to $864.01 on Friday after a, very recent all-time high, and it’s down 20.6% from that high. While earnings are exploding due to AI-related chip demand, Micron’s valuation at 80-times trailing earnings (and closer to 20-times forward earnings) is a bitter pill considering investors never wanted to even pay 10-times earnings for this stock.
Advanced Micro Devices Inc. (NASDAQ: AMD) fell over 13% to $466.38 on Friday, but is down just 14.6% from its fresh high. Intel Corporation (NASDAQ: INTC) finally overtook its old all-time dot-com era highs, and many still discount its value in the AI chip race. After falling it still has a $498 billion market cap. 11.3% to $99.78 on Friday is down 25% from its all-time high reached in May. One key difference here is that AMD was deemed to be ahead of Intel in the race toward powering AI, and AMD has been growing fast while Intel has seen several years of declining sales.
Marvell Technology (NASDAQ: MRVL) was touted as the next trillion company by Jensen Huang (but no timetable given). It fell 16.7% to $263.47 last Friday, but it is still down just 18% from its fresh all-time high. Marvell’s story includes that NVIDIA took a $2 billion stake in the company long before Jensen Huang touted the company.
Taiwan Semiconductor (NYSE: TSM) sits front and center because it manufactures so many of the AI and advanced chips for too many companies to count. In some ways, investors have to worry that all AI-related and compute orders go through TSM.
Qualcomm Inc. (NASDAQ: QCOM) is part of the AI and advanced chip craze. It fell more than 10.9% to $215.94 last Friday and is now down 16.9% from its recent high of $259.97 with “only” a $227 billion market cap.
There are many other semiconductor stocks that could be considered in this same review. SanDisk (NASDAQ: SNDK) has risen more than 30-fold since it became its own public company again, driven by a nearly endless demand, strong NAND pricing, and industry supply constraints. And smaller companies like Everspin Technologies, Inc. (NASDAQ: MRAM) had seen a stock surge of 500% based on future demand expectations for magnetoresistive random access memory (MRAM) technologies being counted as the highest performance memory.
DID THE QUANTUM BUBBLE ALREADY BURST?
And what about quantum computing. This felt like a classic bubble in the making in 2025. Shares rose exponentially based on the promise (or hope) of supercomputers being able to process millions (or billions) of computations simultaneously to solve very complex problems. The problem is that quantum isn’t there yet, and many of the company that led the charge in 2025 hardly have any revenues when compared to the chip giants. That makes their valuations even harder to stomach.
D-Wave Quantum Inc. (NASDAQ: QBTS) fell 13.7% to $23.85 last Friday, but it is still down 48% from its all-time high seen in Q4-2025.
IonQ, Inc. (NASDAQ: IONQ) fell 13.5% to $56.78 last Friday, and it was down 33% from its Q4-2025 high.
Rigetti Computing, Inc. (NASDAQ: RGTI) fell 14.4% to $20.68 last Friday, and it was last seen down 64% from its all-time seen in Q4-2025.
Quantum Computing Inc. (NASDAQ: QUBT) saw its shares fall 11% to $9.95 last Friday, and that was down 61% from its all-time high in Q4-2025.
CRYPTO: FROM BITCOIN TO $#!^COIN
Then there has already been the ongoing 2026 cryptocurrency winter, but Coindesk had cited that there had been $4.4 billion in outflows from Bitcoin from May 14 to June 3 — and that the streak of outflows had ended . Bitcoin and other crypto investors have been waiting for the Clarity Act to solidify some broader use cases for crypto. Despite many investors sticking with crypto, the pain and carnage in the sector have just been too harsh for many investors. There have been waves of forced liquidations in 2026, and so far all of the industry promises and political backing have not yet come to fruition.
Bitcoin itself was down just over 50% from its $126,000 peak as of last Friday. iShares Bitcoin Trust ETF (NASDAQ: IBIT) fell 5.2% to $34.14 on Friday alone, but it was down a sharp 18% from the prior week. This top Bitcoin ETF was down 53% from its high.
Strategy Inc. (NASDAQ: MSTR) has felt more like its prior name of MicroStrategy because of poor performance during the Bitcoin and crypto exodus. Being the single largest public holder of Bitcoin has proven to be painful for investors who wanted to go deeper into the Bitcoin transition. $MSTR fell 6.9% to $120.44 last Friday — and it was then down 74% from the 2025 high.
LESSONS FROM PAST BUBBLES
There are some serious broad concerns that are hard to argue against when investors point to bubbles. While the entire economy is experiencing a rapid run-up in transformative technologies, sharp share price gains followed by sharp losses will echo some famous historical bubbles. Think of these:
The dot-com bubble burst in 2000, when the NASDAQ’s tech leaders and internet stocks peaked (March-2000). Many of the established companies with solid earnings had valuations that were in nosebleed territory. Many of the speculative dot-com stocks had limited sales or were based on “what-if” projections ten years out. The NASDAQ-100 lost over half of its value over the next year, only to face another 50% correction over the following year in the wake of 9/11 and the economic squeeze. It was not for another 15 years that the NASDAQ-100 recaptured its highs, and that doesn’t even consider that many of the index members in 2000 were gone or just shells of their former stocks.
The Covid lockdown of 2020 and what followed also ushered in many bubbles from vaccines to stay-at-home work technology stocks to the so-called meme stocks. The market was also flush with stimulus checks, paycheck guarantees from the PPP, and also as the zero interest rate policy made borrowing as cheap as it was during the global financial crisis. Think of stocks like Zoom, Peloton, Teladoc in stay-at-home and then GameStop and AMC in the “meme bubble.” The stay at home stocks were at least showing real growth, but the meme stock bubble was purely tied to social media hype driving investor interest to ludicrous levels. Moderna’s stock was at $20 in early 2020, but the vaccine-maker surged to nearly $400 by mid-2021.
The market is prone to the creation of bubbles over time. They do not occur every year, but they are formed when valuations reach extreme levels and when investors also expect that nothing can derail those expectations for years into the future. And when investors decide to exit, or are forced to exit whether they want to or not, the exodus and bubble bursting is much more obvious than when bubbles are forming and inflating.
WALL STREET SAYS…
Citigroup doesn’t care about Friday’s sell-off. Strategist Scott Chronert, after Friday’s carnage, raised his base-case S&P500 year-end target to 8,100 from 7,700 based on higher earnings expectations. His new $350 earnings (per share) target for the S&P500 was up from a prior target $320, and he set an initial earnings target of $400 for 2027. Ongoing AI tailwinds are being felt across sectors and a high confidence in (continued) earnings beats through the end of 2026 were cited.
As for Broadcom, the key to the selling, these firms raised their price targets:
- BofA to $539 from $450
- Deutsche Bank to $515 from $430
- Goldman Sachs to $525 from $500
- Jefferies to $550 from $500
- JPMorgan to $580 from $500
- KeyBanc to $575 from $500
- Morgan Stanley to $502 from $485
- Oppenheimer to $535 from $450
- UBS cut its target to $485 from $490
In the weekend The Trader section of Barron’s, the publication wrote ‘Yes, Stocks Were Volatile This Week. Stay Invested.’ The summary noted, “Despite the week’s declines, the market is more likely to see it as a short correction than a major selloff. Investors aren’t selling everything, but shifting into better opportunities.”
A fresh technical review from BofA Securities was titled ‘FANGs get caught in dull scissors’ and points to sharp gains followed by big sell-offs. While the NDX rally extended slightly beyond expectation (above 30,000), BofA cited that the trend became stretched relative to its measured move targets and “equity longs should manage risk with a trailing stop”… The report also noted that the S&P500 had risen nine consecutive weeks through May 29, but they also noted after the pullback: “However, after such streaks break—and following a typical 1–2 week dip—returns have tended to be positive.” The BofA report also Pointed out:
- relative trends favor tickers $MU, $GOOGL, $NVDA, $AAPL;
- and relative trends do not favor $META, $TSLA, $PLTR, $NFLX.
JPMorgan Insights wrote ‘Is the Momentum Trade Over?’ on June 5. A key lesson there — the importance of diversification gives investors a chance to benefit from new sector leadership as opportunities broaden beyond AI.
