The powerful, technology-driven rally that pushed global markets to multiple all-time highs in recent months hit a significant speed bump in mid-November. Fueled by the transformative promise of artificial intelligence, Wall Street’s major indices—alongside key Asian markets such as Japan’s Nikkei 225, South Korea’s KOSPI, and Taiwan’s TWSE—have all enjoyed historic runs, led largely by chipmakers and AI-infrastructure providers. The surge reflected strong belief in a new, enduring economic cycle powered by generative AI and massive hyperscaler investment.
It is undeniable that technology has become a fundamental part of daily life. Whether one is a farmer, student, entrepreneur, or retiree, this era-defining technology—particularly AI—has reshaped the world at every level.
Mr. Saran Sriweraskul, Head of Investor Relations at ROCTEC Global Public Company Limited (SET: ROCTEC), Thailand’s provider of communication systems and technology solutions, noted that while the booming tech trend may be overvalued, its progress is still inevitable.
At this stage, artificial intelligence has transformed business models, with data centers and high-performance computing chips now essential to support AI capability. ROCTEC has already integrated AI into its operations to increase capacity, improve efficiency, and lower costs. The company has also incorporated AI into its Smart Home ecosystem, enabling voice-activated device control.
Mr. Saran further observed that Thailand is currently in a transitional phase of AI adoption, which could become a double-edged sword if growth is not supported by proper regulation and responsible usage.
However, the sharp tech sell-off in mid November signals a chilling return of “AI bubble” concerns. The correction was triggered by the disclosure of substantial short positions taken by renowned investor Michael Burry, best known for predicting the 2008 financial crisis. Burry’s Scion Asset Management revealed sizable bearish bets—primarily via put options—against AI leaders Nvidia and Palantir.
The revelation rippled through markets like a shockwave, triggering broad risk reduction across technology stocks. The logic was clear: if one of the most notable contrarian investors is wagering over a billion dollars against the sector’s leading names, current valuations may be significantly disconnected from fundamentals.
Meanwhile, volatility in rate-cut expectations between mid-October and late-November 2025 further fueled the downturn. In mid-October, the probability of a rate cut exceeded 95%, supported by previous easing measures and signs of a cooling labor market. By mid-November, however, expectations fell sharply—at one point below 50%—after FOMC minutes revealed internal division and lingering concern over persistent inflation near 3%.
As sentiment shifted more hawkish, investors quickly trimmed positions in high-valuation tech names. The Nasdaq Composite dropped roughly 7% MTD between early and mid-November. Yet sentiment sharply reversed later in the month, after dovish remarks from New York Fed President John Williams suggested there was “room for further adjustment.” Rate-cut expectations subsequently rose to about 83%-85%, triggering a rebound in technology equities.
This recovery continued into Black Friday, with the Nasdaq 100 ending the month just 1.6% lower, while the S&P 500 closed broadly unchanged.
Now, as markets have stabilized, it may be worth reflecting on the volatility witnessed just weeks ago—and asking whether the rout was driven by justified caution, or simply just a profit taking in speculation that the Fed will stay interest rates.
Looking back to the market valuation in November, Mr. Sittichai Duangrattanachaya, Head of global market strategist, InnovestX Securities, a subsidiary of SCBX Group, states in his analysis about the AI bubble that the market seems expensive, but not yet a bubble in the 2000 sense where stock prices were far detached from fundamentals. In 2025, even though technology stock prices have surged, their fundamentals are stronger than during the Dot-com Bubble. This is confirmed by several indicators:
The strategist from InnovestX added that the current P/E ratio for the Tech sector (Nov 2025) is approximately 32.6x, which is high, but much lower than the Dot-com bubble peak (Mar 2000) of 64.5x—roughly half. The current market leaders, the Magnificent 7, have a Forward P/E (2026F) of 30.6x, while the Top 5 from the 2000 era (MSFT, CSCO, GE, INTC, XOM) had an average of 43x.
The most important difference from the previous crisis is profit. During the Dot-com era, stocks like Cisco had a nearly 100x P/E ratio, based on hopes of explosive growth, which ended in disappointment. Contrast this with today’s Magnificent 7, which are delivering 16% YoY profit growth, surpassing forecasts—mirrored in rising share prices. Notably, 2026 profit forecasts have been revised upward by 24% YTD, exceeding stock price returns and showing that current price increases are backed by profit.
Today’s tech firms operate as cash machines, unlike their Dot-com era counterparts, which mostly incurred losses and relied on borrowing or fundraising for investment.
Mr. Sittichai believes the short-term risk of a market crash is low, but sees three key risks over the next 2-3 years. First, there is depreciation risk: major tech firms are investing heavily in AI infrastructure and chips, but AI hardware, such as GPUs, has a short lifespan and requires continual reinvestment. If AI cannot generate returns quickly, rising depreciation costs will significantly pressure profits. Second, the CAPEX/Sales ratio for the S&P 500 is rising toward historical highs, a signal seen in past investment bubbles that often ended with disappointing returns. Third, if the broader economy slows or enters recession, the large ongoing AI capital expenditures may become a burden, further squeezing profit margins.
In the meantime, Dr. Narong Borijindargoon, Technical Specialist at SCB 10X, the disruptive technology investment arm of SCBX Group and the creator of Thailand’s open-source AI initiative “Typhoon,” also reflects similar opinion as Mr. Sittichai.
In a letter to “Kaohoon International,” Dr. Narong, commenting as a specialist in technology developer’s view, stated that there are signals indicating overheating in some areas, especially in large budget areas and adoption, but long-term fundamentals are still supportive.
He voiced that today’s changes are driven by a foundational “structural upgrade” in the digital sector to accommodate AI-native workloads, which lays a foundation for the coming decade.
Dr. Narong adds that as global technology investors and developers, SCB 10X sees AI’s main advantage as dramatically lowering the cost of experimentation. Small teams can now achieve what once took large teams years, and product development can shift from months to days, fundamentally lifting productivity. AI also allows humans to focus on truly human work like thinking, analysis, design, and creativity, delegating repetitive or extensive tasks to machines. The most sustainable systems are those that employ a human-in-the-loop approach for efficiency and safety.
However, the surge in technology does not come without risks. He flagged that AI systems are not always deterministic; insufficient oversight or fallback mechanisms can create operational risks. Many firms underestimate the true integration cost of AI, which spans beyond GPU hardware to workflow changes, system integration, and workforce preparation.
Dr. Narong summarized that AI is a high-potential technology that must be deployed systematically, with solid guardrails and human collaboration. Organizations balancing these factors will gain the greatest long-term competitive advantage.
In conclusion, while the recent correction in technology stocks has reignited memories of past market bubbles, today’s landscape differs markedly from the Dot-com era. Industry fundamentals remain robust, with leading tech firms demonstrating solid profit growth, prudent capital allocation, and genuine productivity gains driven by AI integration. Still, both investors and businesses must remain vigilant. The continued transformation underscores the need for disciplined investment, tech-savvy policymaking, and balanced innovation—critical steps as the world enters a new age powered by artificial intelligence.
