AI concept stocks rise more but pull back; is the US stock market bubble warning sounding again?

The AI boom drove U.S. stocks to impressive gains in the first half of the year, but as the second half unfolds, the market has shifted from chasing growth to scrutinizing corporate fundamentals. Chip stocks faced profit-taking pressure, and the Federal Reserve reiterated its anti-inflation stance, dampening market sentiment. Meanwhile, several heavyweight investors have warned that U.S. stock valuations are at historically high levels, reminding investors not to over-concentrate in a single market or tech stocks. In the face of potentially heightened volatility, building a diversified asset allocation strategy becomes even more important.

U.S. Stocks Get Off to a Rough Start in the Second Half, Chip Stocks Hit Hard by Profit-Taking

(Source: TradingView)

On the first trading day of the second half of 2026, major U.S. stock indexes all closed lower, with market sentiment clearly cooling. After a sharp rally driven by AI themes in the first half, the semiconductor sector was the first to see a significant correction, dragging down the Nasdaq and the Philadelphia Semiconductor Index. Among them, chip stocks such as Micron and Sandisk fell more than 10% in a single day, reflecting a wave of profit-taking after substantial gains. According to market statistics, the semiconductor sector had accumulated gains of over 80% in the first half of the year, and as the market entered a new quarter, short-term selling pressure emerged.

On the other hand, Federal Reserve Chair Kevin Warsh stated at the European Central Bank forum that U.S. inflation is still above the desired level, and the Fed remains committed to bringing inflation back to 2%, but offered no further guidance on the future direction of interest rates, keeping the market focused on whether the high-interest-rate environment will persist.

AI Hype Not Over, but Tech Stocks Begin to Diverge

Although semiconductor stocks were weak, not all AI-related stocks fell simultaneously. Meta surged 8.8% in a single day on reports that it would develop a cloud business and sell idle AI computing power, showing that market capital is still willing to chase companies with new growth stories. This indicates that the AI investment theme has not disappeared, but the market is paying more attention to whether companies can sustain revenue and profit growth in the future, rather than relying solely on market narratives to boost valuations. Going forward, the performance of tech stocks will depend more on actual earnings reports and AI commercialization capabilities, rather than pure market sentiment.

Jeremy Grantham Warns Again: U.S. Stock Valuations Could Be the Biggest Bubble in History

Beyond the short-term market correction, what has sparked more discussion among investors is another warning from legendary investor Jeremy Grantham. The co-founder of GMO, who correctly predicted the dot-com bubble and the 2008 financial crisis, pointed out that the U.S. stock market is currently one of the most overvalued in U.S. history, with valuations even higher than those during the 2000 dot-com bubble.

He believes that if the market eventually reverts to long-term average valuations, the U.S. stock market could face a correction of nearly 70%. Grantham specifically noted that the biggest risk is not the overall market, but the heavy concentration of capital in a few large-cap tech stocks. While AI leaders like NVIDIA have performed well in recent years, historical experience shows that the stocks that rise the most in a bull market are often the ones that fall the hardest in a bear market.

Ray Dalio: Investors Should Pay More Attention to Asset Allocation

In addition to Jeremy Grantham, Bridgewater Associates founder Ray Dalio recently reminded that U.S. stock valuations are approaching levels seen before the 2000 dot-com bubble and the 1929 Great Depression. However, most market participants also believe that high valuations do not necessarily mean an immediate market reversal, as market sentiment can persist for a considerable period.

Therefore, rather than trying to predict market tops, it is more important to:

1. Avoid over-concentrating assets in a single market
2. Diversify appropriately across different industries and countries
3. Maintain long-term investment discipline
4. Control overall portfolio risk

This is why global asset allocation has gained increasing attention in recent years.

Global Diversification Becomes a New Trend: What Opportunities Exist Beyond U.S. Stocks?

In recent years, AI development is no longer limited to the United States. Beyond U.S. tech giants: South Korea has a critical global semiconductor supply chain, including companies like Samsung Electronics and SK Hynix; Hong Kong’s market hosts major tech companies such as Tencent, Meituan, and Xiaomi; and new energy, smart manufacturing, and biotech are becoming important investment themes in Asian markets. As a result, more and more investors are adopting global allocation rather than betting solely on U.S. stocks to reduce the impact of single-market volatility.

Gate Stock Officially Launches, Building a Global Stock Investment Platform

In response to the growing demand for global asset allocation, Gate has officially launched a stock trading service, offering both an App and a Web version, allowing investors to participate more conveniently in global stock markets. Currently, Gate Stock supports over 12,500 stocks and ETFs, covering more than 10,000 U.S. stocks and ETFs, over 1,500 Hong Kong stocks, and the top 1,000 listed companies on the Korea Exchange (KRX). From AI, semiconductors, finance, and consumer goods to new energy and smart manufacturing, investors can build positions across all these sectors on a single platform.

Trade Global Stocks with USDT, Lowering the Investment Barrier

One of the key features of Gate Stock is that it supports direct trading of stocks using USDT. Investors do not need to open additional overseas brokerage accounts, exchange currencies into USD, HKD, or KRW, or manage assets across different markets separately. Simply transfer USDT to the stock account to trade U.S., Hong Kong, and Korean stocks, significantly improving cross-market investment efficiency. Additionally, the platform uses a unified stock account structure, allowing centralized management of both stocks and digital assets, making overall asset allocation more convenient.

Fractional Shares and 7×24 Trading Enhance Global Investment Flexibility

Beyond global market coverage, Gate Stock offers several features to improve investment efficiency. The platform supports fractional share trading down to 0.01 shares, allowing investors to start building positions in high-priced stocks with lower capital. At the same time, 197 popular stocks currently support 7×24-hour round-the-clock trading, covering U.S., Hong Kong, and Korean stocks, including: Apple, NVIDIA, Tesla, Meta, Amazon, Tencent Holdings, Xiaomi Group, Samsung Electronics, SK Hynix, and Hyundai Motor. Investors can seize more trading opportunities anytime in response to earnings reports, major news, and global market changes.

Summary

The AI boom remains a key investment theme in global markets, but as tech stock valuations continue to rise, market volatility may also intensify. Both Jeremy Grantham and Ray Dalio remind investors to avoid over-concentrating assets in a single market or a few hot tech stocks, and instead improve portfolio resilience through better asset allocation. For investors seeking to participate in global tech growth while managing risk diversification, Gate Stock offers a one-stop investment platform covering U.S., Hong Kong, and Korean markets, with over 12,500 stocks and ETFs, supporting USDT direct trading, fractional shares as low as 0.01 shares, and 7×24-hour round-the-clock trading, enabling investors to efficiently allocate globally and capture more long-term investment opportunities across different market cycles.