AI Infrastructure Doubts Deepen Chip Selloff on Wall Street
Chipmakers extended their losing streak as investors questioned whether heavy AI infrastructure spending will generate adequate returns.
Key takeaways
- A major chipmaker index fell for an eighth straight session, its longest losing streak since 2008.
- Investors shifted toward healthcare, financial, materials and smaller-company shares as AI-related stocks declined.
Chip stocks extended their losses Friday as doubts grew over returns from AI infrastructure spending. The Nasdaq 100 fell 1.8%, and an index of major chipmakers declined for an eighth straight session, its longest losing streak since 2008.
At 18:21 UTC Friday, CoreWeave shares were down 12.8% at $60.77. The Economic Times reported an earlier 9.5% decline, amid concerns that infrastructure investment may be outpacing companies’ ability to generate returns.
Investors were looking for clearer evidence that spending on data centers, power, networking and other infrastructure would pay off, the report said. Higher interest rates also add to financing costs and reduce the present value of future earnings.
As AI-related shares fell, healthcare, financial, materials and smaller-company stocks performed comparatively well, according to Brian Jacobsen of Annex Wealth Management.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
