Fomo is fueling the AI stock frenzy. Marvell’s spike is just the latest sign.

Marvell Technology’s stock jumped 30% to a record close on Tuesday after Nvidia CEO Jensen Huang stated the company could become the 'next trillion-dollar company.' Huang’s comment triggered the rally, despite Marvell already rising 158% this year, reflecting broader AI-driven speculation in tech hardware stocks. The surge highlights how investor 'fear of missing out' (FOMO) is driving stock prices beyond fundamentals. Steve Sosnick, chief strategist at Interactive Brokers, noted that parabolic moves in stocks like Marvell and Hewlett Packard Enterprise (which rose 18% on strong AI-driven earnings) signal speculation rather than sober valuation. Such rapid gains carry risks, particularly if major cloud spenders like Microsoft reduce capital expenditures. Huang’s remarks also boosted software stocks, reversing earlier fears of an AI-driven 'SaaSpocalypse' that could replace software with AI agents. His statement that AI models would not eliminate software companies led to a sector-wide rally. Even lesser-known stocks are benefiting from AI speculation, though analysts caution that overvaluation could lead to a correction. Sosnick compared the trend to a 'Circle Line' effect, where investors rush to avoid missing gains, only to reverse course when momentum fades. The risk remains that AI demand may not sustain current growth levels, potentially triggering a selloff in hardware and software stocks tied to AI infrastructure. Until then, speculative trading continues to dominate, with investors prioritizing momentum over long-term fundamentals.