Silver’s worst day in 46 years serves as a warning for the 2 hottest trends in the stock market: AI and quantum computing

For the past three years, bulls have dominated the Wall Street scene. All major stock market indices have risen to multiple all-time highs, with game-changing innovations and candid trends leading the way. This includes the rise of artificial intelligence (AI), the advent of quantum computing and the precious metals bonanza that saw silver and gold catapult to all-time highs.

But when things seem too good to be true on Wall Street, they often are. It’s a lesson silver investors learned firsthand last week, and it’s plain-as-day warning for AI and quantum computing stock investors in the future.

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A visibly worried person looking at a rapidly growing and descending stock chart on a tablet. — Image source: Getty Images.

While AI and quantum computing have dominated investment headlines, it is silver which has given great returns over the past year. Before the wildest trading session that precious metals investors have witnessed in 46 years on January 30, silver futures were approaching a return of nearly 300% over the final year.

There are certainly fundamental catalysts that have driven this rally. For example, precious metals can rise due to supply and demand. Silver is a critical component used in solar panels and batteries for electric vehicles. As the use of renewable energy proliferates, demand for this shiny metal is expected to increase.

Both gold and silver were also clear beneficiaries of a rapid increase in the US money supply during and after the COVID-19 pandemic. Gold and, to a lesser extent, silver are seen as stores of value amid an apparently growing money supply. While the physical allocation of gold and silver on planet Earth is finite (meaning we cannot create any additional gold or silver), the US Treasury Department continually prints US dollars, based on the prevailing monetary policy of the Federal Reserve.

But those fundamental factors took a backseat to something far more dangerous over the past two months: the fear of missing out, or FOMO. Seeing others succeed and making money as an asset appreciates compels some investors to join. From late November through the early morning hours of January 30, FOMO helped lift silver futures from about $50 an ounce to a high of nearly $122 an ounce.

On Friday, January 30, the wheels fell off the proverbial wagon. Silver futures plunged 31% in a single session, marking the worst day for the shiny metal since March 1980. While some posters on social media platforms and stock message boards incorrectly blame manipulation or point to President Donald Trump’s nomination of Kevin Warsh to be the next Fed chair as the catalyst for silver’s historic decline, the FOMO movement explains this bubble.

While the expanding US money supply and growing demand for physical silver will work in its favor over the long term, an upward move of more than 140% in a 10-week period would never be sustainable. This same FOMO serves as a warning for the other two Wall Street trends: AI and quantum computing.

A New York Stock Exchange trader looking in awe at a computer monitor. — Image source: Getty Images.

It is not difficult to understand why investors are so attracted to AI and/or quantum computing. Analysts at PwC believe artificial intelligence can create more than $15 trillion in economic value by 2030, while the Boston Consulting Group predicts quantum computing will add $450 billion to $850 billion in global economic value by 2040. These are sizable addressable markets that can result in a list of winners.

There have been several surprising winners of these game-changing technology trends. AI data mining specialist Palantir Technologies (NASDAQ: PLTR) it briefly became the 19th publicly traded US company and is up nearly 2,200% since the start of 2023. Palantir uses AI and machine learning in its two main operating platforms, Gotham and Foundry.

Meanwhile, a quartet of pure quantum computing stocks have soared. As of mid-October 2025, the trailing 12-month returns IonQ (NYSE: IONQ), Discard IT (NASDAQ: RGTI), Quantum D wave (NYSE: QBTS)i Quantum Computing Inc. (NASDAQ: QUBT) it went up to 6,200%! The prospect of specialized computers solving complex problems that traditional computers can’t tackle is resonating with investors.

But the previously touted technologies share a common link: investors overestimate the rate of adoption, utility and/or optimization of that technology.

Adoption has not been a problem for AI, with infrastructure sales aptly described as “otherworldly”. However, AI solutions are not particularly close to being optimized. It will likely be years before companies maximize their sales and profits after their aggressive AI investments. This means that Palantir’s price-to-sales ratio of nearly 100 is not sustainable.

Quantum computing fails at both ends of the spectrum. On the one hand, IonQ, Rigetti Computing, D-Wave Quantum and Quantum Computing Inc. are still in the early stages of marketing their computers and specialized services. Moreover, Wall Street analysts expect that it will be many years before quantum computers can solve practical problems more cost-effectively than classical computers.

Investor expectations for AI and quantum computing have outpaced the rate of optimization of both technologies. While that hasn’t stopped FOMO from playing a role in raising the tide for high-flyers like Palantir, IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc., history teaches us that such moves are not sustainable.

Silver’s worst day in 46 years serves as a reminder of how dangerous FOMO can be, and points to the growing likelihood of an eventual bubble-bursting event for AI and quantum computing.

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Sean Williams has no position in any of the aforementioned stocks. The Motley Fool has positions and recommends IonQ and Palantir Technologies. The Motley Fool has one disclosure policy.

Silver’s worst day in 46 years serves as a warning for the 2 hottest trends in the stock market: AI and quantum computing was originally published by The Motley Fool

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