A financial newsletter recently focused on the vulnerability of the stock market to a correction in AI stocks. They noted that the top 10 most valuable stocks in the S&P 500 were all AI companies. They have had a huge runup in share prices, yet market expectations are that there will continue to be explosive growth in the sector. The editorial questioned the likelihood of actual revenue being sufficient to reward investor expectations due to a hidden limitation. The scramble to build huge data centers to provide support for the fastest chips needed for the mammoth build-out of computer power to meet demand looks like it will face increasing short-falls in energy supply. The demand for electricity for such energy-intensive endeavors is hitting a wall, a basic upper limit in availability of electric grids to accommodate further growth. Will there be a day of reckoning coming to cause a severe market correction? Could that be hastened by onset of the tidal power outages raising questions about reliability of the US electric power infrastructure?

You are seeing the juxtaposition of the known vulnerability of the AI sector to investor trepidation simply because of their power intensive nature exceeding supply. Once the tidal power outages are underway and raising serious doubts about the stability and reliability of the power grids themselves, let alone their capacity needing great expansion, it will be a perfect setup for a major correction in share prices in the AI sector, so that is very likely to happen.