Investors around the globe pulled back from technology equities on Thursday, sending the Nasdaq futures down 1.1% shortly after the opening bell. The sell‑off was the steepest decline for the tech‑heavy index since July, driven by a mix of higher interest rates, rising component prices and growing competition from China.
AI‑related firms lead the decline
Shares of companies tied to the artificial‑intelligence build‑out fell hardest. CoreWeave, a data‑center provider backed by Nvidia, slid 6% in pre‑market trading after a 15.5% drop the day before. Oracle opened more than 2% lower, following a near 9% plunge on Wednesday. Intel, SpaceX and Nvidia were also set to open sharply lower.
Neil Wilson, a strategist at Saxo, warned that “worries about the AI build‑out, bubbly valuations, lower‑than‑expected earnings growth at leading U.S. frontier labs, Chinese competition, inflation and rates sent investors running for the covers.” He highlighted slowing revenue growth at Anthropic and OpenAI as additional red flags.
Mixed signals from AI developers
Anthropic, at an investor presentation ahead of its anticipated IPO, reported quarterly sales of $17 billion – a 45% increase from the prior quarter, more than double the growth seen in the second quarter. Nonetheless, the rapid expansion raised questions about sustainable demand.
TSMC CEO C.C. Wei, speaking on the company’s earnings call, cautioned that rising component prices and macro‑economic uncertainty were dampening demand in some market segments. Despite posting strong earnings, TSMC’s shares closed 2% lower, pulling the Taiwan technology index down 3.5%.
Asian markets feel the shock
South Korea’s Kospi led Asian declines, falling 7.6% after chipmakers SK Hynix and Samsung Electronics dropped 11% and 9.5% respectively, triggering a circuit‑breaker that temporarily halted trading. Japan’s Nikkei slipped 4.9%, while Hong Kong’s Hang Seng fell 1%.
In Europe, a technology index lost 3% in early afternoon trade, with Dutch semiconductor leader ASML down nearly 5%.
U.S. inflation worries add pressure
The global retreat followed a sharp sell‑off on Wall Street after a strong U.S. inflation report heightened concerns that higher interest rates could make financing AI projects more expensive. Many AI firms carry significant debt, making them vulnerable to tighter credit conditions.
Mohit Kumar, chief European economist at Jefferies, noted that a slowdown in AI infrastructure would likely curb U.S. growth expectations. He reminded readers that the United States now spends a larger share of GDP on AI than it did on building railroads in the 1800s. While Kumar expects earnings to remain robust, he warned that a potential Democratic win in the midterm elections could be “negative for the sector.”
China’s semiconductor push adds competition
Adding to market jitters, Chinese chipmaker CXMT announced progress on advanced memory chips, intensifying competitive pressure on U.S. and South Korean manufacturers and raising doubts about future profitability for those firms.
The sell‑off underscores the volatility that has characterized AI‑related stock valuations throughout the year. While some analysts argue that fears of a bubble have been overstated, the current market reaction reflects genuine concerns about financing, competition and the pace of AI adoption.
Original reporting: KRDO (Colorado Springs metro) — read the source article.
