Investors Retreat as AI Stock Rally Faces Skepticism

Eric Marshall, president of Hodges Capital, warned that the history of industrial expansion suggests overbuilding is inevitable once capital floods a sector. While Tuesday’s slide remains an isolated event for now, it highlights a growing anxiety that market valuations may have decoupled from underlying earnings reality. The selloff was broad, hitting industry heavyweights and niche players alike. Micron Technology suffered a 13% decline, marking its steepest drop since the start of 2025, though the stock retains a threefold gain for the year. Meanwhile, Nvidia shares slipped 3.5%, and Tesla dropped 5% despite data showing its European sales figures doubled in May.