Global markets have hit turbulence after months of surging tech valuations, but investors and analysts say there’s no need to panic — at least not yet. The recent slide in artificial intelligence–linked stocks, they argue, looks more like a healthy correction than the start of a meltdown.

Tech Selloff Spreads Across Markets

The decline, now in its second day, has pulled major Asian indices lower. Markets in Seoul and Tokyo have both slipped around 5% from their recent highs. In the U.S., Nasdaq futures fell another 0.2% on Wednesday following a 2% drop for the index the previous day.

Some of the steepest losses came from the market’s biggest winners. Chipmaker Nvidia, which has soared to become the world’s most valuable company, dropped nearly 4% on Tuesday and is now about 7% below its October peak. The downturn also hit AI suppliers, rivals, and other tech firms across the sector.

“The selloff appears to be largely positioning-driven, with the top-performing stocks taking the brunt of the hit,” said Jon Withaar, senior portfolio manager at Pictet Asset Management in Singapore.

Palantir’s Results Trigger Market Jitters

There was no single catalyst for the broader pullback, but investors pointed to the surprising reaction to Palantir Technologies’ quarterly results. Despite reporting strong earnings, the AI and data analytics company’s stock plunged nearly 8% on Tuesday and dropped another 3% in after-hours trading.

“This looks like broad profit-taking in the high-risk, high-reward segment of the market,” said Angus McGeoch, head of equities distribution for Asia at Barrenjoey in Hong Kong. He added that fund managers nearing the end of the financial year may be locking in profits rather than exiting tech altogether.

“People don’t want to give up much after such a strong year,” McGeoch said. “If markets rebound, it won’t take much for investors to jump back in.”

A Natural “Wobble,” Not a Collapse

Despite recent concerns about inflated valuations and macroeconomic risks — including high interest rates, persistent inflation, and uneven global growth — markets have largely brushed off warnings for months. Even after Tuesday’s 2% Nasdaq dip, the index remains more than 50% above its April lows.

Still, some top Wall Street executives are urging caution. Ted Pick, CEO of Morgan Stanley, and David Solomon, CEO of Goldman Sachs, both warned at a Hong Kong investment summit that a pullback in equities was overdue.

In Asia, South Korea’s exchange also issued a routine caution about SK Hynix — whose stock had tripled in a year — prompting a 6% decline over two days.

“It’s a textbook profit-taking phase,” said Charu Chanana, chief investment strategist at Saxo Bank. “These corrections are healthy signs of consolidation rather than panic.”

Looking Ahead

Some investors even see the downturn as a buying opportunity. Matthew Haupt, lead portfolio manager at Wilson Asset Management in Sydney, said he added positions during the dip, betting that sentiment will recover quickly.

“I’ve been buying today,” Haupt said. “I hope I’m right.”

The brief selloff comes as investors await Wednesday’s U.S. Supreme Court hearing on the legality of President Trump’s tariffs, an event that could ripple through global markets in the days ahead.