- - Why this hot AI trade just got smoked: Opening Bid top takeaway

Brian SozziAugust 11, 2025 at 11:36 PM

The rally rages on.

In what is becoming somewhat old news in 2025, stocks have entered a new week of trading, hovering at record highs. Markets are rallying around the Fed potentially cutting interest rates in September to jumpstart a cooling economy.

A Bank of America global fund manager survey found 91% of those polled indicated US stocks are overvalued. This group suggests investors rotate into less-loved sectors such as Utilities and Energy.

Some on the Street are also speculating that a hot Consumer Price Index (CPI) reading on Tuesday would reignite stagflationary fears. What will happen in September is still anybody's guess, with a slowing job market, the potential tariff effect on inflation, and a president keen on lower rates.

"This is not a unique time where we can only look at the data, the administration and their impact on various facets of the economy has to be considered," Tom Essaye, founder of Sevens Report, said on Opening Bid.

Around the horn -

Nvidia (NVDA) and Advanced Micro Devices (AMD) have agreed to give the US government 15% of their chips revenue from China. Both agreed to the financial arrangement as a condition for obtaining export licenses to China from the Trump administration. AMD didn't return Yahoo Finance's request for comment.

The BofA survey reveals that the "Magnificent Seven" long trade remains one of the most crowded in the markets. But with the likes of Nvidia and AMD seemingly kissing the ring of President Trump, are investors underpricing key risks in Big Tech? It's a thought they should probably start having right now.

Bitcoin (BTC-USD) prices rallied close to $123,000 overnight. Some of the gains have been given back this morning, but not all. The move is noteworthy as bitcoin had been stuck in a tight trading range since the early part of July. There doesn't appear to be a clear catalyst for the pop today, though a Sunday post on X from bitcoin evangelist Michael Saylor may have stoked the bulls. It suggests he will continue to be a buyer — perhaps no surprise, but the crypto market likes to be coddled. "If you don't stop buying Bitcoin, you won't stop making Money," Saylor wrote.

Zoom-in: C3.ai crashes, hard

Shares of C3.ai (AI) plunged 24% this morning. The stock is now off by 60% from its 52-week high.

And the rout is 100% warranted.

Late Friday, the company said it sees preliminary first fiscal quarter revenue of $70.2 million to $70.4 million, about 33% below the midpoint of its prior guidance of $100 million to $109 million. The revenue represents a 19% year-over-year drop.

The adjusted operating loss will be $57.7 million to $59.9 million, roughly twice the $23.5 million to $33.5 million loss it had expected.

I don't think there's anything to read into the AI trade here — this seems very company-specific and tied to a major sales reorganization. The company is also reeling as spiritual leader and CEO Tom Siebel continues to deal with health issues, which have prompted him to search for a successor.

"But I think now is probably the time to pivot away from some of the pure plays and go to more of bank shots on AI, and names like that would be in the industrials that, you know, aren't even tech stocks, but are benefiting from all of the infrastructure spending," John Campbell of Allsprings Global Investments said on Opening Bid.

"So there's some companies like Powell Industries or Emcor that are more focused on electrical equipment or even construction of data centers," Campbell added.

As for C3.ai, it could take the company several quarters to get its mojo back. In the meantime, I would expect the Street's earnings per share estimates for the next two years to collapse.

"We have previously lacked conviction around the durability of growth given an increasing reliance on nonrecurring revenue and suspect the preliminary results reflect this trend," DA Davidson analyst Lucky Schreiner said. "It is likely the business gets worse before it gets better from here."

StockStory aims to help individual investors beat the market.

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].

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