#valuation-risk

#valuation-risk

Softbank, the Japanese tech holding company run by legendary Masayoshi Son, sold 100% of its Nvidia Corp. ( NASDAQ: NVDA) shares, which yielded $5.8 billion. It is speculated that the money will be allocated to other tech investments, which Son may believe yield larger returns. Softbank holds equity positions in several artificial intelligence (AI) companies, led by OpenAI. It is also part of a huge U.S. AI infrastructure play known as Stargate.

Technology-sector assets like COMM stock have performed well this year, but after a blistering rally, value-focused folks may be concerned about a potential bubble and crash. However, before writing CommScope stock off as overvalued, it's worthwhile to take a deep dive into the company's fundamentals. Then, you can make a more informed decision about a stock that, even after a major melt-up, could actually still be a good value.

Following in the footsteps of David Solomon at Goldman Sachs and Jamie Dimon at JPMorgan, Ark Investments guru Cathie Wood recently warned of the potential for a reality check for the stock market after the massive Artificial Intelligence rally that has driven the major indices to all-time highs over the last three years. Of course, "Reality Check" is Wall Street word salad for a sell-off and a potential correction.

Bank of America Research has issued a fresh warning for equity investors: the S&P 500, now hovering near historic highs, is demonstrating elevated risk levels with 60% of the firm's proprietary "bear market signposts" flashing red-just shy of the point that has historically heralded a market peak. The bank's S&P 500 Relative Value Cheat Sheet, published Monday, reflected growing caution among the team led by Head of U.S. Equity Strategy Savita Subramanian.

However, for investors seeking more diversification, I think it can pay dividends (quite literally) to consider complementing a U.S. equity-heavy portfolio with some European names. Sure, going 100% (or close to it) in the U.S. names will grant you a front-row seat to America's long-term ascent, and there's nothing fundamentally wrong with doing so. However, I believe it doesn't hurt to add some international exposure as well for the value of geographic diversification and, perhaps more importantly, lower valuations.

Rocket Lab ( NASDAQ: RKLB ) has been a breakout star in the space economy, with its stock skyrocketing 600% in the past 12 months. On Tuesday, RKLB shares jumped after the company celebrated the completion of its Neutron rocket launchpad, Launch Complex 3 (LC-3), at Wallops Island, Virginia, signaling it was making progress toward its medium-lift ambitions. Yet, just a day later, the stock plummeted 11.72%, closing at $43.53, as investors reassessed its lofty valuation.