Raspberry Pi (LSE: RPI) shares were among the biggest fallers on the FTSE 250 on Wednesday (10 June), losing over 14% at one point during the day — and then pulling back a few percent.

There’s been no real news since the soaring computer company released a first-half trading update on 5 June, so there doesn’t seem to be anything negative for shareholders to watch out for. But we’ve seen volatile rides for US chip stocks this week, with the upcoming SpaceX IPO making a lot of investors anxious. Is it just nerves?

Cracking half

Last week’s update was impressive, and the share price jumped 28% on the day. So even after this latest retreat, we’re only back around where we were before the day before. And Raspberry Pi shares are still up 176% so far in 2026. My Twelfth Magpie colleague Edward Sheldon examined the full details.

The company reported H1 “profitability materially ahead of the prior year,” with management expecting to ship 4m units in the half — which doesn’t actually conclude until 30 June.

There is one cloud on the horizon, though, as the company told us “the pricing and availability of DRAM and non-volatile memory remains challenging“. With the AI surge meaning almost every tech company out there is clamouring for chip memory, that challenge could go on for a while.

So why the fall?

In the absence of any concrete trigger, I have to see this latest price fall as a combination of investor sentiment and some profit-taking. US Magnificent Seven stocks seem to be weathering this week’s ups and downs reasonably well.

But Bank of America analysts are growing concerned over the way stocks on high price-to-earnings (P/E) ratios have been outperforming lower P/E stocks. And they say seven of their 10 bear-market signals have flashed up in recent months.

So for any investor who’s seen the value of their Raspberry Pi shares soar so high this year, converting some of it into hard cash is understandable.

What should investors do?

I confess I’m excited about the possibilities that AI could bring for Raspberry Pi. But I’m wary of the valuation of the shares right now. So I’ve compared the forecast P/E valuations analysts currently have on Raspberry Pi with a couple of US chip makers. They might not be exactly comparable, but they do make products beyond single chips.

I threw in Tesla just for fun really, to show how high positive sentiment can push a stock’s valuation. It’s anyone’s guess what SpaceX might command.

Growth vs risk

This really does look like a stock best suited to investors with diversified growth portfolios, and who are happy to take risks on individual high valuations. And anyone looking for an AI play might do well — especially if we see more down days like this. But Raspberry Pi shares are too rich for my blood.

Should you invest £5,000 in Raspberry Pi Plc right now?

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Alan Oscroft does not hold any positions in the companies mentioned.