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Recent AI Stocks Decline
The Nasdaq is down 7% as of now, insufficient for a correction, yet specific AI stocks have faced larger declines. Nvidia (NASDAQ: NVDA) is down 14% from its high, indicating a correction, while Palantir Technologies has dropped 25%, entering bear market territory. CoreWeave has experienced a 60% decline since June.
Interest Rate Impacts
Investors had expected a December interest rate cut from the Federal Reserve, but uncertainty looms. Smaller companies like CoreWeave, which spent over $6.2 billion on capital expenditures in the first nine months of 2025, may encounter challenges with rising rates affecting their recovery.
Investment Strategy Recommendations
Given the volatility, investors are advised to focus on established companies at fair prices rather than chasing potential winners like Nvidia or Palantir. This strategy aligns with Warren Buffett’s advice to improve chances of achieving market-beating returns over time.
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