CRM Reddit Mentions | ChartExchange

Here is an economics/ finance perspective:
You're not wrong that it looks contradictory, but there are a few structural things going on that explain it.
**Most of these stocks were just expensive.** When people say a stock is "expensive" they don't mean the share price is high, they mean the price relative to what the company actually earns is stretched. That's measured by the P/E ratio (price to earnings). A lot of these names were trading at 30x, 40x, even 60x+ earnings. That means investors were paying $40-60 for every $1 of profit, betting that growth would eventually justify that price. When confidence wobbles even slightly, the market re-rates them. The company can be doing fine, but the market decides it's no longer willing to pay 40x and marks it down to 25x. That alone can be a 30-40% drop with zero change in fundamentals. That's called multiple compression, and it's what's hitting both groups right now.
**Interest rates make this worse.** Growth stocks are valued on future earnings. When interest rates are higher, those future earnings are worth less today in present value terms. So the maths behind the valuation literally changes even if the business doesn't. This hits high-P/E tech disproportionately hard regardless of whether the company is an AI builder or an AI "victim."
**Passive investing amplifies everything.** A huge amount of money now sits in index funds. These funds buy and sell based on market cap weighting, not fundamentals. That means the biggest tech names get bought simply for being big, and when sentiment turns, they get sold for the same reason. It doesn't matter that NOW and NVDA are completely different businesses — they're in the same indices, held by the same funds, and sell together when money flows out.
I**n sell-offs, correlations breakdown**. This is a well-known pattern. When investors de-risk, they sell what's liquid and what's gone up the most. During risk-off periods, correlations across stocks spike toward 1. Fundamentally unrelated companies drop together because it's the same money exiting, not because the market has a coherent view on each individual company.
So in your example.
The incumbents like NOW, ADBE, CRM aren't getting wiped out. They're getting repriced. There's real competition from AI-native tools, margins might compress, growth might slow, but these are massive businesses with deep customer lock-in and switching costs. A price correction is not the same as going bust.
The AI infrastructure companies aren't a bubble in the dot-com sense either. The spend is real, the revenue is real, and the demand for compute isn't slowing. Think of them less like speculative bets and more like electricity providers: everyone needs the infrastructure, and these companies are building the plumbing. Many of them are also diversified businesses (GOOG and META aren't pure AI plays, they have enormous ad businesses generating cash regardless).
Both can drop at the same time because the market isn't making a coherent argument. It's a bunch of different actors repricing risk, unwinding crowded positions, and adjusting to rates, all at once. The contradiction you're seeing is the market being a market, not the market being right about two opposite things.

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