NVIDIA (NVDA, Financial) remains the most searched and actively traded stock on the Interactive Brokers platform. This indicates a strong global investor preference for this fundamentally solid tech giant over meme stocks lacking foundational support. However, a sudden rise in speculative trading of low-priced "emerging hot stocks," which have seen significant price jumps, suggests heightened speculative fervor in the U.S. stock market, potentially signaling a stock bubble.
Interactive Brokers' Chief Strategist, Steve Sosnick, noted that Oklo, Bright Minds Biosciences (DRUG), and 180 Life Sciences (ATNF) have unexpectedly risen to the platform's top 25 most actively traded stocks. This unusual activity draws attention to a speculative bubble underpinned by irrational exuberance, with Oklo climbing to eighth place on the list. Supported by OpenAI CEO Sam Altman, Oklo's focus on small nuclear reactors has seen its stock surge by about 144% over the past week.
U.S. tech giants like Google (GOOG) and Amazon (AMZN) have shown interest in nuclear energy to meet the rising power demands of AI-driven data centers. These companies are turning to nuclear power for its clean, efficient, and stable energy to support their data infrastructure expansion.
Bright Minds Biosciences' stock soared from $1.08 to $38.49 in just two trading days. Despite significant fluctuations, its stock hit a peak of $79.02 before closing at $47.21, maintaining a 110% daily gain. Recently, the company announced a major collaboration with Firefly Neuroscience (AIFF), aiming to leverage data analysis in drug development.
180 Life Sciences also experienced a dramatic price increase, reaching $17.75 after announcing a pivot to online gambling. Despite a rapid drop from its peak, the stock still closed four times higher than its previous levels at $4.69.
Bank of America's recent survey pointed out rapidly expanding stock market bubbles, driven by the Federal Reserve's rate easing and the optimistic outlook for a U.S. economic "soft landing." The survey showed a rise in fund managers' preference for equities, with a notable increase from the previous month.
Economist David Rosenberg has been warning of a potential U.S. market crash, predicting a possible 39% correction. He advises caution against following market hype, particularly around major tech stocks like NVIDIA and Apple, urging investors to focus on stocks with robust business models and growth potential while incorporating defensive elements into their portfolios.
