Billionaire venture capitalist Chamath Palihapitiya says investors are moving into risk-off mode as profit-taking follows a strong tech earnings cycle.
On the latest episode of the All-In Podcast, Chamath Palihapitiya says investors and traders are digesting unprecedented infrastructure commitments across big tech and weighing how the spending wave will filter into future earnings.
He says investors are not reacting to personalities or headlines, but to a natural reset after a record stretch of AI-driven gains and fierce expectations for results.
“There are two sets of things that are happening. The first set of things is that the market is learning to digest all of the CapEx that has happened. And they’re all breathlessly trying to build models that try to predict what the ROI is of that spend.”
Palihapitiya says the second dynamic lies in how investors are reassessing earnings potential across the major players, especially within the Magnificent 7, where results have sharply diverged.
“The second part of that is they’re trying to figure out how this new spend will actually impact future earnings… Google’s earnings were phenomenal. Their AI numbers were blazing hot. Facebook’s was terrible. Apple is now in this really interesting place where it seems like they’re going to cede their AI business to Google and pay them billions of dollars a year, like they get paid billions of dollars a year for search from them.”
He says investor positioning is also being influenced by seasonal behaviors that are now being pulled forward, not by OpenAI drama.
“I just think this is natural market machinations… Let me book some wins. Let me get ready for the new year. Let me tax loss harvest… And now this price action starts in mid-November.”
Palihapitiya forecasts a temporary cooling period as traders lock in gains and derisk into year-end, calling the pullback a reset rather than a trend break.
“I think we are getting in the risk-off phase for at least two or three months.”
But he expects investors to return to the market following a period of consolidation.
“We will be back firmly in risk-on mode in February is my suspicion.”
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