Howard Marks: Why did NVIDIA plummet on Monday, and why did asset management stocks also suffer a heavy decline? This is "irrational."

Howard Marks, co-founder of Oak Tree Capital, stated that the sharp decline in NVIDIA has severely impacted the stock prices of overseas asset management companies this Monday, demonstrating the market's irrationality. "If investors remain objective and calm, the news about NVIDIA should not have affected these seemingly unrelated companies."

On Tuesday local time, Marks mentioned at the Global Alts 2025 conference held in Miami that the sell-off triggered by DeepSeek on Monday not only affected NVIDIA but also impacted asset management companies such as Brookfield Asset Management, Apollo Global, KKR, and Blackstone, which is a rare phenomenon.

Marks described this plunge as a "classic case of an irrational market." In his view, the adjustment of AI concept stocks should have been a localized event, but investors' excessive reaction to "fear of missing out" (FOMO) led to a collective impact on related sectors such as asset management, real estate, and utilities. This emotional transmission is akin to a domino effect—when the market discovered that NVIDIA's AI chips might face competition, panic quickly spread throughout the entire "AI infrastructure ecosystem."

Public data shows that overseas asset management giants have tilted their portfolios towards the high-growth AI sector over the past six months: from data center real estate and server power supply facilities to loan underwriting for AI companies, the entire industry chain has been swept up by a capital tide. Marks sharply pointed out, "This is a typical symptom of a bubble period—when greed replaces the fear of loss, the risk pricing mechanism fails."

Previously, the president of the Managed Funds Association, a lobbying group for the U.S. hedge fund industry, expressed optimism about the new Trump administration and harshly criticized former SEC Chairman Gary Gensler, who proposed to strengthen regulations on private equity and hedge funds.

However, Marks told attendees that under Trump's leadership, the situation is far from certain, as many policies implemented by the new government "conflict with each other."

"I don't know if government members can predict what they will do a year from now. I certainly know I can't. Besides a disdain for those in power, I think you cannot articulate commonalities in these activities."

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