Altimeter’s Brad Gerstner Says Markets Were Due For A ‘Breather’ After ‘Bubble’ Behavior: Report

• Altimeter CEO Brad Gerstner dismissed bubble concerns, comparing the AI boom to past long-term tech supercycles.
• He said Altimeter’s position in Nvidia was “as large as it had ever been” heading into earnings.
• The firm trimmed exposure in the AI bellwether last week as the rally in tech shares accelerated. 

Altimeter Capital CEO Brad Gerstner reportedly said the recent pullback in markets is “healthy,” adding that investors were due for a “breather” after months of relentless gains.

“The Nasdaq’s gone up 40% off the bottom in April. The market was kind of looking for a reason for a breather,” Gerstner told CNBC in an interview. “This week, what you saw across the market is everybody looking for an excuse to sell the trade.” 

“I think it’s healthy. We’re taking some of the air out of the bubble. There’s a wall of worry that stands in front of us.”

– Brad Gerstner, founder and CEO, Altimeter

U.S. equities were in the red during midday trade on Friday. The SPDR S&P 500 ETF (SPY) fell 0.35%, the SPDR Dow Jones Industrial Average ETF (DIA) slipped 0.22%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) dropped 1.6%. Retail sentiment around QQQ on Stocktwits improved to ‘bullish’ from ‘bearish’ territory over the past day and was among the top trending tickers on the platform. 

AI Supercycle Still Intact

Even with the pullback, Gerstner rejected the notion that markets are in a bubble. He likened the current artificial-intelligence boom to past technology “supercycles” that ultimately exceeded early expectations despite short-term corrections. Altimeter manages public equity funds that primarily invest in technology companies.

“My experience living through three supercycles — internet, social media, and cloud — they all ended up far bigger than we thought,” he said. “We’re going through this digestion phase. I think digestion is good, because that prevents the bubble that everybody was worried was forming. I don’t think we’re in a bubble.”

Altimeter Adjusts Tech Exposure Before Nvidia Earnings

Gerstner said Altimeter’s position in Nvidia (NVDA) was “as large as it had ever been” heading into earnings, but the firm trimmed exposure last week as the rally in tech shares accelerated. 

“We rolled back our overall exposures at the end of last week because we felt like the market was pretty pumped up,” he said. “We see the consumer weakening, like everybody else sees, and I think the market could take a breather into the end of the year ahead of Q4 earnings.” Nvidia is set to report results on November 19.

Nvidia’s stock was also among the top trending tickers on Stocktwits in midday trade. The shares fell nearly 3%, trading at around $182, after hitting a record high of $212.19 last week. Retail sentiment around the AI bellwether remained in ‘bullish’ territory, accompanied by ‘high’ levels of chatter, over the past day.

Read also: XRP, Bitcoin, Ethereum Extend Losses Despite ETF Boost But Dogecoin Defies The Drop

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