Market's Fear Gauge Spikes, Signaling Potential Dip for AI Stocks

History shows S&P 500 declines often follow a spike in the VIX, but quality AI stocks likely to rebound

Mar. 22, 2026 at 10:50pm

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The S&P 500's fear gauge, the CBOE Volatility Index (VIX), has recently spiked to 24, indicating rising investor uncertainty. History shows that such spikes in the VIX have often been accompanied by or resulted in declines in the S&P 500, which could mean near-term challenges for AI stocks that have led the market's gains in recent years. However, the article suggests that savvy investors should view this as a potential buying opportunity, as quality AI stocks are likely to bounce back and continue their long-term growth trajectory.

Why it matters

AI stocks have been among the market's top performers in recent years, as investors recognize the transformative potential of the technology. However, the current market volatility, driven by concerns about the AI revenue opportunity and broader economic and geopolitical uncertainties, has shaken investor confidence. Understanding how the market's fear gauge, the VIX, has historically impacted AI and technology stocks can help investors navigate the current environment and identify potential buying opportunities in quality AI companies.

The details

The S&P 500 has soared more than 78% over the past three years, led by the strong performance of well-known AI stocks like Nvidia, Palantir Technologies, and Meta Platforms. Investors have been eager to bet on companies that develop, sell, or use AI technology, which has the potential to improve everything from office operations to factory efficiency and spur innovation. However, as companies have been spending billions to build out their AI infrastructure, some investors are questioning whether the current spending levels are justified by the future revenue opportunity. Additionally, broader market concerns, such as the ongoing war in Iran and uncertainty about the pace of interest rate cuts in the U.S., have contributed to the recent volatility.

  • The S&P 500 has soared more than 78% over the past three years.

The players

Nvidia

A leading developer of graphics processing units (GPUs) and other AI-related hardware and software.

Palantir Technologies

A data analytics company that provides AI-powered software solutions to government and commercial clients.

Meta Platforms

The parent company of Facebook, which has been investing heavily in AI and machine learning technologies.

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What’s next

The article suggests that savvy investors should view the current spike in the VIX as a potential buying opportunity, as quality AI stocks are likely to bounce back and continue their long-term growth trajectory.

The takeaway

The recent volatility in the market, as indicated by the spike in the VIX, may lead to near-term declines in AI stocks. However, this should be seen as a chance for investors to buy into quality AI companies that have strong long-term outlooks, as the technology's transformative potential remains intact despite the current uncertainty.