/AI%20(artificial%20intelligence)/Close-%20up%20of%20computer%20chip%20with%20AI%20sign%20by%20YAKOBCHUK%20V%20via%20Shutterstock.jpg)
AI stocks will crash, with many current leaders losing 50% of their value from their peaks.
The answer to “why?” requires us to go back a few weeks to June 8, 2026. That’s when OpenAI announced it had confidentially filed its S-1 paperwork with the SEC. The hype machine was working overtime, with bankers floating an unprecedented public valuation target of up to $1 trillion.
But before we could even get to the next calendar month, the news has completely flipped. According to reports on June 25, OpenAI’s financial advisors are now blinking, actively urging the company to push its heavily anticipated IPO all the way back to 2027.
That’s a reality check.
OpenAI’s private funding rounds have been an exercise in exponential asset inflation, jumping to an $850 billion-plus valuation in March 2026. Bankers presented CEO Sam Altman with a clear choice: lower the valuation expectations to get the listing cleared sooner, or delay the IPO until 2027 to protect the $1 trillion target. Altman reportedly declared that any reduction in that trillion-dollar figure was an absolute non-starter.
Why are the advisors suddenly so terrified? Because they just watched what happened to Elon Musk’s SpaceX (SPCX) debut. The massive rocket listing shot out of the gate, briefly turning Musk into a trillionaire, before experiencing a sharp pullback. The bankers likely realized that public market retail demand is completely exhausted from chasing overextended narratives.
When a startup is private, it can survive entirely on the romantic projections of venture capitalists. But the public market demands immediate, transparent mathematical execution.
The underlying financial disclosures reveal a staggering operational situation: OpenAI posted an astronomical net loss of $38.5 billion for 2025 on $13.07 billion in revenue. Even with monthly revenue pacing at a resilient $2 billion earlier this year, the company is still projected to burn through roughly $14 billion in losses for 2026.
When you combine that cash burn with a massive $600 billion data center and infrastructure commitment stretching out to 2030, the hurdle for public investors becomes completely impossible to meet in a high-interest-rate environment. Public market allocators are no longer willing to subsidize massive losses just for the promise of top-line generative AI growth.
OpenAI’s decision to delay its filing has convinced me that AI stocks will crash within weeks or months, not years. This is the warm up.
We are getting ready to see investors disappointed for the sole reason that whatever great things will come from the AI era, they won’t arrive on schedule.
One quick and clean way to show the path that AI stocks have taken as a unit is to check the chart of the Global X Artificial Intelligence & Technology ETF (AIQ). In the same way that Bitcoin (BTCUSD) investors who were early earned all the profits, so too do I expect AI investors to go.
The technician in me looks at that weekly chart of AIQ above and thinks “it is just a matter of time, and the path of least resistance is down.” I say that because the percentage price oscillator (PPO), my favorite momentum indicator, which I think of like a gas pedal and brake all in one, is tapping the brake. Its ascent has slowed, and most of the time, that means it will top out. Then roll over.
To translate this into more actionable targets, consider that early adopters of this ETF saw it go from $20 to $70 in just over three years. Now in the mid-$60 range, the fact that it launched from the $45 level makes that one downside target. $30 is the next one down, and that’s as far as I can see at this point.
Think of it this way, because this is not specific to AIQ, but to AI stocks in general. And to investing in these modern markets. There are many stocks that are up 50% over 3-5 years’ time, and their owners brag about that. This is typical of go-go market cycles.
However, as with AIQ, if the path from $20 to $30 or even $35 involved a trip to $70 on the way, hopefully that gets my point across. I believe strongly that this is the eventual future path for AI stock investors. All while AI and LLMS continue to quickly change our lives, mostly for the better.
Innovation and progress and investing in stocks are different things. And there’s no such thing as “fair value” when it comes to AI. Stocks are pushed higher than expected on hype and hope, and they crash to earth based on the reversal of that sentiment. I think OpenAI just closed the door on the first part of that story.
Rob Isbitts created the ROAR Score, based on his 40+ years of technical analysis experience. ROAR helps DIY investors manage risk and create their own portfolios. For Rob’s written research, check out ETFYourself.com.
