Asia Pacific markets are mostly set to fall, pressured by declines in AI-related names like Palantir. Goldman Sachs and Morgan Stanley executives warned investors of an impending market correction. Palantir shares slid 8% despite strong earnings, highlighting investor caution around high AI valuations.

AI-fueled euphoria has sent stock prices to new highs, but investors are concerned that some companies' valuations have outpaced their progress.

The AI buildout has lifted the sales and stocks of companies across various sectors, but none have seen their valuations rise as dramatically as power providers, especially start-ups developing novel nuclear technology.

Morningstar analysts earlier this month published a list of the best artificial intelligence (AI) stocks to buy now. The top two spots were awarded to Microsoft ( MSFT +0.59%) and Taiwan Semiconductor Manufacturing ( TSM +1.54%). Other analysts may not classify them as the "best" AI stocks to buy now, but Wall Street is generally bullish.

Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has been the odd one out in the Magnificent Seven for a while. The stock didn’t make parabolic gains, whereas most other AI stocks were on a rally that was truly deserving of the “Magnificent” title.

According to LSEG data, tech giants including Microsoft, Alphabet, Amazon, and Meta are poised to report revenue rising at a swift pace in the July-September quarter.

On Wall Street, more gains for Nvidia, Amazon and other AI superstars propped up share prices. The S&P 500 rose 0.2% and pulled closer to its all-time high set last week, even though the majority of stocks in the index sank. The Dow Jones Industrial Average dropped 226 points, or 0.5%, and the Nasdaq composite climbed 0.5%.

US stocks closed mixed Monday, with Nvidia and other tech giants driving modest gains for the S&P 500 and Nasdaq, while the Dow Jones declined. Major

Lauren Taylor Wolfe, co-founder of activist investment firm Impactive Capital, recently told CNBC’s Squawk Box that the surge in enthusiasm around artificial intelligence is bearing all the signs

Palantir Technologies CEO called the company’s earnings “the best results that any software company has ever delivered.” The stock market kindly disagrees. Its shares sank 7.6% in the Tuesday premarket after rising 0.