US 'Flashing the Same Warning Signs,' Wall Street Commentator Warns as China’s AI Stock Crash Wipes Out $480 Billion in Under Four Months

China’s artificial intelligence stock selloff has erased roughly $480 billion in market value in under four months, fueling warnings that U.S. markets are showing the same signs of a bubble.

China’s AI Stocks Crash

China’s STAR50 index, which tracks its biggest AI and chip companies, has fallen about 40% after trading at nearly 250 times trailing earnings at its peak, according to Reuters and market commentator Bull Theory on X.

The country’s broad blue-chip index CSI 300 is in a bear market, down 20% from its June high, with Chinese stocks losing $3.5 trillion since their May peak.

AI stocks made up 42% of China’s market, according to the commentator, adding that “the first AI bubble has burst.”

MiniMax Group Holdings Ltd. and Zhipu AI have lost a combined $150 billion from their highs, while robot maker Unitree has fallen 50% since its August listing.

The US Flashes Similar Signals

AI-linked stocks account for 49% of the S&P 500’s value, according to JPMorgan, above the 42% share they held of China’s market before its crash.

The Nasdaq 100 has fallen 3.31% over the past month but remains up 16.14% year to date, while the S&P 500 is down 0.09% over the month and up 11.93% this year.

Anthropic has filed for an IPO at a valuation that could reach $2 trillion, despite losing $80.7 billion in the first half of the year. The Wall Street Journal reported it is targeting a debut the week of Nov. 16, raising $100 billion or more.

“The US is now flashing the same warning signs China did before its AI stocks crashed,” Bull Theory said.

🚨 THE FIRST AI BUBBLE HAS BURST.

China's STAR50 index, which tracks the country's biggest AI and chip companies, has crashed 40% in less than four months.

That has wiped out about $480 billion in market value.

The damage has spread across the whole market.

China's main CSI… pic.twitter.com/LtC6nEcXnU

— Bull Theory (@BullTheoryio) October 26, 2026

AI Stocks Under Pressure

U.S. tech stocks have been on a rocky path this month as investors worry about the debt behind AI spending, with Meta Platforms Inc.’s (NASDAQ:META) credit default swaps and CoreWeave Inc.‘s (NASDAQ:CRWV) bond yield hitting record highs.

ETF	AUM	Avg. Expense Ratio	1 Month	3 Months	YTD	1 Year
iShares PHLX SOX Semiconductor Sector Index Fund (NASDAQ:SOXX)	$43.23 billion	0.33%	+11.23%	-11.26%	+89.02%	+110.14%
iShares U.S. Technology ETF (NYSE:IYW)	$24.31 billion	0.37%	+5.40%	+4.92%	+32.75%	+35.35%
Fidelity MSCI Information Technology Index ETF (NYSE:FTEC)	$22.15 billion	0.08%	+4.41%	+5.09%	+33.92%	+35.54%
iShares Expanded Tech Sector ETF (NYSE:IGM)	$10.73 billion	0.37%	+4.94%	+3.28%	+30.95%	+34.24%
iShares Future AI & Tech ETF (NYSE:ARTY)	$3.68 billion	0.47%	+5.03%	+2.85%	+62.56%	+71.12%
Roundhill Generative AI & Technology ETF (NYSE:CHAT)	$1.63 billion	0.75%	+4.97%	-6.02%	+56.02	+54.08%

Price Action: The State Street SPDR S&P 500 ETF Trust (NYSE:SPY) closed 0.71% higher at $765.37 on Monday, while the Invesco QQQ Trust (NASDAQ:QQQ) closed 1.11% at $712.20.

Benzinga Edge rankings indicate the State Street ETF has a Momentum score in the 69th percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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