The logic behind the recent U.S. tech stocks' 'earnings massacre'

Why doesn’t he buy SpaceX? Or OpenAI? Because Buffett calculates clearly: SpaceX’s market cap stands at $1.4 trillion, with a price-to-sales (P/S) ratio of 85x; OpenAI’s valuation is $85.2 billion—and it’s still unprofitable. Such lottery tickets don’t even merit a glance from him. He buys only Google—because it generates cash flow, possesses a wide economic moat, and offers certainty. Investing $10 billion in Google reflects a lending mindset—not a gambling one. SoftBank has poured roughly $65 billion into OpenAI, generating paper gains of up to $45 billion at one point. Yet in June 2026, when Masayoshi Son attempted to pledge his OpenAI shares as collateral to borrow $10 billion from banks, the banks flatly refused—OpenAI is a private company; its equity is difficult to value and even harder to liquidate. The loan amount was later reduced to $6 billion, but negotiations remained deadlocked. It wasn’t until August 7 that the loan was finally finalized. However, the banks imposed a lethal margin call clause: should OpenAI’s equity fair value drop sharply, SoftBank would be required to post additional collateral; failure to do so would empower the banks to forcibly sell the pledged shares—further depressing valuation and triggering a death spiral. Even more critically, SoftBank has also committed to injecting another $10 billion into OpenAI in October—a sum that 'is highly likely to be raised again via pledging remaining OpenAI shares as loan collateral.' Meanwhile, SoftBank’s $40 billion bridge loan, maturing in March 2027, is urgently seeking new lenders—lead arrangers JPMorgan Chase and Goldman Sachs are unwilling to shoulder the entire burden and are instead parceling out the loan among 21 institutions, including First Abu Dhabi Bank and Singapore’s GIC. Do you see it now? Son holds hundreds of billions in 'paper wealth,' yet must sign a margin-call clause just to borrow $10 billion—and must borrow another $10 billion in October. His liquidity is stretched so thin that he can survive only by chaining pledges and loans upon loans. This isn’t real wealth—it’s high-leverage gambling. If OpenAI’s IPO is delayed or its valuation corrects, Son won’t merely face smaller profits or losses; he’ll confront margin calls → forced share sales → further valuation decline → more margin calls—the dreaded death spiral. Securing the loan doesn’t signal stability; it signals another round of leveraged betting. He started by pledging his pay stub—now he’s pledging his property deed. All for one big gamble: whether he’ll win remains uncertain—but if he doesn’t, he’ll be wiped out. Even Google—a genuine cash cow generating $174 billion in annual operating cash flow—can’t withstand AI’s burn rate and needs to borrow $10 billion from Berkshire. Compare that to OpenAI and SpaceX: where does their money come from? From gamblers like Son, from retail investors’ margin accounts, and from the faith that 'this time is different.' When truly wealthy people back you, your rise is gradual—because they’re buying for real. When the 'wealthy' or gamblers back you, you ride a rollercoaster—because what they seek isn’t ownership, but volatility and price swings. IV. What do the latest developments signify? Some may argue: Didn’t Berkshire start spending on August 8? And didn’t SpaceX’s lock-up expiration trigger a rally—not a selloff? Does this not suggest a shift in fundamentals? Precisely the opposite: it underscores that investor sentiment—and willingness to deploy capital—is the sole variable at play. Berkshire has indeed begun spending—but extremely selectively.

Berkshire Hathaway’s stock hits an all-time high, signaling the market’s emergence from the shadow of Buffett’s retirement

Berkshire Hathaway’s stock price hit a new record high on Wednesday, marking a clear shift in market confidence—from concerns over Warren Buffett’s departure to growing endorsement of his successors’ leadership capabilities. Berkshire’s Class B shares surpassed their previous peak set on May 2, 2025. On May 3, 2025, Buffett surprised investors, supporters, and even his own successors by announcing he would step down as CEO after nearly six decades at the helm. Following that announcement, Berkshire’s stock declined for several consecutive months, reflecting investor anxiety over how Buffett’s exit might affect the performance of this diversified conglomerate. As of press time, Berkshire’s Class B shares rose 0.5% to $542.60 on Wednesday. This rebound also bolsters Greg Abel—the company’s newly appointed leader. With less than a year to go before Abel formally assumes the top role, he has already begun taking action and gradually revealing his distinct management style.

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