Vietnam Insight

Correction driven by concerns over high valuations. US stock futures declined further on Wednesday after the major averages fell sharply in the previous session amid growing concerns over elevated AI valuations. Dow futures shed 0.1%, while S&P 500 and Nasdaq 100 futures dropped 0.4% and 0.6%, respectively. In regular trading on Tuesday, the Dow fell 0.53%, the S&P 500 dropped 1.17% and the Nasdaq Composite tumbled 2.04%. Palantir shares plunged 7.9% on valuation concerns despite beating earnings estimates. AI chip heavyweight Nvidia also dropped 4% while Tesla lost 5.2% ahead of the EV maker’s shareholder meeting this Thursday. The selloff came as the S&P 500’s forward P/E ratio climbed above 23, near its highest since 2000, heightening fears of a correction after months of concentrated gains in a handful of AI stocks. Comments from Goldman Sachs’ David Solomon and Morgan Stanley’s Ted Pick, warning of potential 10–20% market drawdowns, deepened the risk-off mood.

Trading in a range. VNINDEX closed at 1,651.98 (+34.98 points, +2.16%) with liquidity at the level of the 20-session average. The market had 189 advancing stocks and 117 declining stocks. The stock groups exerting the greatest downward pressure on the market were VIC, VPB, TCB; the groups supporting the market were FPT, GAS, VPL. Foreign investors had a net buying of 1,222 billion VND.

Trading Strategy: Investors may consider short-term trades within the 1,600–1,700 range. If the market successfully retests the 1,600 level, investors can also deploy capital for medium- to long-term positions, focusing on stocks with strong momentum — such as those benefiting from an upgrade in market classification, robust earnings growth, or valuations that remain lower than the overall market average.

Buy recommendation: KDH, MWG