Analysis: The extreme narrative of an "AI bubble" bursting in the short term is unlikely to materialize

ChainCatcher News, a research report by CITIC Securities stated that the decline in the US stock market on November 20 was mainly driven by macro factors, rather than a panic sell-off triggered by the bursting of the AI bubble. The main reason for this correction was the combination of unexpectedly strong non-farm payroll data in September and hawkish comments from the Federal Reserve, which prompted profit-taking in the market. Coupled with signs of weakening in the US labor market, the Federal Reserve's December policy meeting may become the peak of the current "hawkish panic" sentiment, after which the market's main focus may shift to the contest over Trump's nomination of the new Federal Reserve chairman.

The fundamentals of the AI sector remain solid. With token exponential growth, ongoing supply chain bottlenecks, and the four major tech giants maintaining strong cash flows and balance sheets, the extreme narrative of an imminent "AI bubble" burst is unlikely to materialize in the short term.