Should AI stocks stop loss or continue to buy the dip? Let's see what Buffett has to say.

Recently, AI concept stocks have fallen significantly - NVIDIA dropped 14% entering a technical adjustment, and Palantir fell 25% heading towards a Bear Market. Many investors are starting to panic, wondering whether to move to the next “hot concept.”

But there is a piece of data worth noting: the Nasdaq has only fallen by 7%, and it hasn't yet reached the 10% threshold for a correction. What has truly plummeted are small-cap AI infrastructure stocks like CoreWeave, which have halved by 60%.

What's the issue? Interest rate expectations are fluctuating. Large companies like Google's parent company Alphabet have $98 billion in cash and don't mind spending $9.1-9.3 billion on capital expenditures. However, financing entities like CoreWeave have raised a lot of funds and burned through $6.2 billion in capex in the first half of the year. If interest rates don't decrease, costs will rise significantly, and recovery seems far off.

What to do? Don't chase the “next Nvidia” anymore — such opportunities are almost impossible to seize in advance. Nvidia has risen over 1400% from October 2022 to now, who knew it in advance?

Berkshire Hathaway's advice is most useful at this time: find good companies and wait for reasonable prices. This round of correction may be a correction, or it may just be starting. But rather than betting on a dark horse, it's better to look for those with growth potential and reasonable valuations—over the long term, this path has a higher win rate.