With valuations in the U.S. stock market becoming increasingly stretched, the chief executive of Southeast Asia’s largest bank is warning investors to expect turbulence ahead.

“We’ve seen a lot of volatility in the markets. It could be equities, it could be rates, it could be foreign exchange,” DBS CEO Tan Su Shan told CNBC, adding that she expects that volatility to continue.

Tan, who took over the helm of DBS from longtime CEO Piyush Gupta in March, said that investors were particularly worried about the lofty valuations of artificial intelligence stocks, especially the so-called “Magnificent Seven.”

The Magnificent Seven — Amazon, Alphabet, Meta, Apple, Microsoft, Nvidia and Tesla — are some of the major U.S. tech and growth stocks that have driven much of Wall Street’s gains in recent years.

“You’ve got trillions of dollars tied up in seven stocks, for example. So it’s inevitable, with that kind of concentration, that there will be a worry about. ‘You know, when will this bubble burst?'”

Earlier this week, at the Global Financial Leaders’ Investment Summit in Hong Kong,  it was likely there would be a 10%-20% drawdown over the next 12 to 24 months.

Morgan Stanley CEO Ted Pick said at the same summit that investors should welcome periodic pullbacks, calling them healthy developments rather than signs of crisis.

Tan agreed. “Frankly, a correction will be healthy,” she said.

Recent examples include Advanced Micro Devices and Palantir, both of which posted stronger-than-expected quarterly results on Tuesday, yet their shares — and the wider Nasdaq — fell.

Her remarks follow similar warnings by the International Monetary Fund and central bank chiefs Jerome Powell and Andrew Bailey, who have all cautioned about inflated stock prices.

Tesla CEO Elon Musk says the company will likely need to build a “gigantic” semiconductor fabrication plant to keep up with its artificial intelligence and robotics ambitions.

“One of the things I’m trying to figure out is — how do we make enough chips?” Musk said at Tesla’s annual shareholders meeting Thursday.

Tesla currently relies on contract chipmakers Taiwan Semiconductor Manufacturing Company and Samsung Electronics to produce its chip designs. Musk said he was also considering working with U.S. chip company Intel. 

“But even when we extrapolate the best-case scenario for chip production from our suppliers, it’s still not enough,” he said.

Tesla would probably need to build a “gigantic”  chip fab, which Musk described as a “Tesla terra fab.” “I can’t see any other way to get to the volume of chips that we’re looking for.” 

Microchips are the brains that power almost all modern technologies, including everything from consumer electronics like smartphones to massive data centers, and demand for them has been surging amid the AI boom.

Tech giants, including Tesla, have been clamoring for more supply from chipmakers like TSMC — the world’s largest and most advanced chipmaker. 

According to Musk, Tesla’s potential fab’s initial capacity would reach 100,000 wafer starts per month and eventually scale up to 1 million. In the semiconductor industry, wafer starts per month is a measure of how many new chips a fab produces each month.

For comparison, TSMC says its annual wafer production capacity reached 17 million in 2024, or around 1.42 million wafer starts per month.

While Tesla doesn’t yet manufacture its own microchips, the company has been designing custom chips for autonomous driving for several years.

It is currently outsourcing production of its latest-generation “AI5” chip, which Musk said will be cheaper, power-efficient, and optimized for Tesla’s AI software.

The CEO also announced on Thursday that Tesla will begin producing its Cybercab — an autonomous electric vehicle with no pedals or steering wheel — in April.

Musk’s statements underscore Tesla’s shift into AI and robotics — industries the CEO sees as the future of the global economy. 

“With AI and robotics, you can actually increase the global economy by a factor of 10, or maybe 100. There’s not, like, an obvious limit,” Musk said at the shareholder meeting. 

October’s job losses in the U.S. were nearly twice as high as a month earlier — the steepest for any October since 2003, data from outplacement firm Challenger, Gray & Christmas showed.

The technology sector was the hardest hit, with 33,281 cuts, almost six times September’s total.

Being laid off is an awful feeling — and it must feel bitterly ironic to work in a field that’s developing the very technology making you redundant.

One person spared both redundancy fears and existential doubt is Tesla CEO Elon Musk, who just had a nearly $1 trillion pay package approved by Tesla shareholders.

To earn the full trillion, though, Musk has to meet a chain of performance targets, culminating in Tesla reaching an $8.5 trillion valuation.

Its market cap is currently $1.54 trillion — by contrast, the world’s most valuable company now is Nvidia, which briefly hit a $5 trillion valuation last Wednesday.

After Thursday’s slump in tech stocks, however, Nvidia’s market cap has dipped to a “mere” $4.57 trillion.

Other tech companies, such as Microsoft, Broadcom and Palantir Technologies, also fell broadly over concerns that their stock prices are too high. Those moves dragged the tech-heavy Nasdaq Composite down by 1.9%.

For most tech workers and investors, Thursday was another reminder of volatility’s sting. For Elon Musk, it was just another day on the road to the stratosphere.

Inside the Gulf’s trillion-dollar AI gamble

After raking in trillions of dollars in oil revenue, the Gulf monarchies have become known for splashing cash on big-ticket projects like sci-fi-worthy cities in the desert, major sports franchises, and advanced military hardware.

Now, though, as they face prolonged lower crude prices, some of the region’s leaders are looking at leveraging their vast sovereign capital to build domestic artificial intelligence industries.

— Emma Graham