Nasdaq Just Had Its Worst Quarter in 3 Years… But Buffett (And I) Saw It Coming a Mile Away

Last summer when I was talking about Buffett offloading Apple shares and hoarding a record $343 billion cash pile (one-third of Berkshire’s market value) while everyone else was getting back into OTD option trading and altcoins, some of y’all rolled your eyes so hard I could hear them clicking through the screen.

“Relax,” you probably thought. “The market’s up 20%... two years in a row. AI is taking over. Everything’s fine. Have a juice box.” And honestly, I don’t blame you. After a monster 2023 and a red-hot start to 2024, anyone talking about risk sounded like that one guy at the party warning you about the “economic collapse” they heard Alex Jones talk about while you’re three beers into a cornhole tournament.

But here we are. Yesterday, the Nasdaq Composite logged its worst quarter in three years, dropping 10.4%, and suddenly those warning signs don’t seem so tinfoil hat anymore.

Want to know what’s dragging it down? Look no further than the Nasdaq 100 (aka the AI hype express) which has fallen 8.3% over the same period. And the so-called “Magnificent 7” has collectively lost over $2 trillion in market value since January.

Nvidia’s down 21% year to date. Broadcom’s fallen 33% from its December peak. Oh and… Microsoft, Meta, Amazon, Alphabet they’re all down 20%+ from their highs and analysts are lowering their price targets every week (just trying to act like they weren’t bullish to start the year). This is far more than a “healthy pullback” or “market rotation.” It’s a vibe shift. And it all starts with one thing: tariffs AI spending.

Last week, Alibaba’s co-founder pretty much said the quiet part out loud… demand for AI computing power isn’t exactly keeping up with how fast we’re building data centers. Microsoft (who’s spending $80B on data centers this year) just walked away from several projects in the US and Europe. Suddenly, investors are realizing the ROI on all this AI infrastructure is looking more like a speculative NFT than a sure thing.

OpenAI is still raising billions, and AI demand probably isn’t dead. But right now, the market is asking… are we throwing $300B+ in capital expenditures at a dream that’s already priced in? I think you know the answer.

And as if that wasn’t enough anxiety, President Trump is revving up a new round of tariffs… again. He’s threatening a 20% universal import tax, which could add another $5K–$10K on the price of a car and turn global trade into a cage match. He’s calling it “Liberation Day” (but none of our investment accounts feel the same way). We’ve now got 900+ companies mentioning tariffs on earnings calls like it’s 2018 all over again. One manufacturing exec told the Fed he hasn’t seen this much uncertainty in 50 years. And that guy’s probably survived at least three financial crises and a mullet.

So do I think this is a full blown crash? Not necessarily. Stocks don’t just go straight up forever, and even the most overhyped bubbles take their sweet time to pop. But it does mean the days of easy wins might be over at least for now. Valuations are still high (24x forward earnings, above the 20-year average) and Wall Street’s starting to look at valuations again.

Oh, and about the headline… don’t get it twisted. I’m not comparing myself to Warren Buffett… unless he also spends his weekends screaming into the void about overvalued tech stocks while everyone else is YOLO’ing into Palantir like it’s 2021 all over again.

I’ve been waving the “maybe this market’s a little bubbly” flag for a while now… back when people were still treating every AI company like it was printing gold bars in the basement.

Now, stocks are finally on sale, and this is where the real money gets made. Not when everyone’s buying the top and bragging about it on Reddit… but when things are ugly, uncomfortable, and discounted like a President’s Day mattress sale.

Stock.News has positions in Apple, Microsoft, Meta, Amazon, and Alphabet.

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