This is a big deal. It's Reuters, not some blogger, saying this. The STAR50 index of AI and semiconductor stock in China is down 40%. P/E from the index dropped from around 250 to 100, which is still high. The investment community in China is concerned about other indices over-weighting tech stocks with high P/E ratios.
Then index funds pick them up and funnel capital into them. AI stocks are 42% of China's market capitalization, so index funds are bent way out of shape.
Tesla's P/E is somewhere around 450, incidentally.
This is a big deal. It's Reuters, not some blogger, saying this. The STAR50 index of AI and semiconductor stock in China is down 40%. P/E from the index dropped from around 250 to 100, which is still high. The investment community in China is concerned about other indices over-weighting tech stocks with high P/E ratios. Then index funds pick them up and funnel capital into them. AI stocks are 42% of China's market capitalization, so index funds are bent way out of shape.
Tesla's P/E is somewhere around 450, incidentally.