AI’s hot streak is cooling as experts see a correction—not a collapse—driven by slow adoption, rising costs and shaky ROI.

AI pioneer Nvidia was again the heaviest weight on the market. The chipmaker's drop of 3.2% brought its loss for the month to nearly 11%, putting it in "correction" territory, or when a stock falls at least 10% from its previous high. The company is scheduled to report is third-quarter financial results on Wednesday.

The S&P 500, a broad measure of stocks, gained 1.5% as trading opened. The tech-heavy Nasdaq jumped 2%, but later backed down slightly from its high. The Dow Jones Industrial Average rallied 600 points, around 0.8%.

Wall Street strategist Julian Emanuel says investors are right to be worried about the high levels of debt building up among tech companies.

Growing concerns about an artificial intelligence bubble have, in large part, caused the stock market’s recent bout of volatility. So the AI industry will face an enormous test when Nvidia, the world’s most valuable company and backbone of the AI boom,

Generative AI is rapidly reshaping market research by enabling the creation of “synthetic personas” and “digital twins”—AI-generated proxies that simulate consumer responses and behaviors, dramatically reducing the time and cost of traditional research.

Nvidia Corp. delivered a surprisingly strong revenue forecast and pushed back on the idea that the AI industry is in a bubble, easing concerns that had spread across the tech sector.

The Roundhill Generative AI and Technology ETF was established in May 2023, so it doesn't have a very long track record of performance for investors to analyze. However, it has soared by an eye-popping 150% since then, crushing the Nasdaq-100 which has returned 91%, and also the S&P 500 ( ^GSPC 1.66%) which is up 66% over the same period.

Many mid-market companies have found themselves stuck in the same trap as their enterprise peers: promising pilots with underwhelming results.