Global technology stocks took a nosedive this week. Concerns over AI funding and rising interest rates sent investors scrambling. More than $1 trillion vanished from the market value of 20 top AI and semiconductor stocks this week. Nvidia wasn't immune, dipping about 2%, while AMD and Intel each saw declines of around 4%. Dell Technologies suffered an 8% drop.
The neocloud sector felt the pain too. CoreWeave fell 3%, Nebius slipped 5%, and IREN tumbled over 8%. Micron initially dropped by 5% but managed to climb back into positive territory by noon ET. Nvidia CEO Jensen Huang, speaking at an event in Stockholm, offered a bit of comfort. He mentioned that Nvidia didn't have to support CoreWeave financially, saying, "Their cost of capital is actually decreasing."
Asian markets echoed the global downturn. South Korean chipmaker SK Hynix plummeted over 10% and Samsung Electronics fell 8.73%. Other South Korean tech stocks also took hits: LG Innotek dropped 8.95%, Seoul Semiconductor lost 9.28%, and Samsung SDI declined 6.26%. In Japan, SoftBank Group fell 7.9%, Advantest plunged nearly 14%, and Tokyo Electron lost 6.45%. Renesas Electronics declined 8%, while Taiwan's TSMC was down 1.81%.
European markets didn't escape the slide. ASML fell 5.2%, Infineon Technologies dropped 8.2%, and ASM International shed 8.6%. Investors are growing increasingly anxious. Rising borrowing costs could stifle the substantial capital needed for AI infrastructure. There's also worry about a potential oversupply of memory chips by 2029, as manufacturers boost production to meet AI demand.
Meanwhile, China's ChangXin Memory Technologies announced a breakthrough in memory architecture, raising data density. Elon Musk chimed in on X, predicting China would produce "a LOT of RAM in 2028." Executives from Broadcom and Intel also weighed in. They warned that financing might soon become a significant hurdle for the AI boom. Broadcom's Hock Tan suggested it could be a bigger problem than shortages of chips or electricity.
The sell-off followed a rough day on Wall Street Wednesday. Technology shares led the way down. The tech-heavy Nasdaq Composite fell 1.88% to 26,692.87. The S&P 500 dropped 1.11% to 7,718.94, and the Dow Jones Industrial Average slipped 0.09%.
Dan Ives, a tech analyst at Yorkville Ives, remarked that the recent sell-off in AI-related stocks reflects mounting concerns over financing costs for massive infrastructure projects as U. S. Treasury yields climb above 5%. But he emphasized that the demand for AI computing power remains robust. "Higher yields raise the cost of financing these builds, and investors are right to focus on balance sheets and contract structure, but rates are a financing question, not a demand question, " Ives wrote in a note.
Ives also suggested the current market dip could be a buying opportunity. The AI infrastructure boom is still in its early stages despite concerns over funding costs. He noted that a shift in demand signals, rather than interest rates, would change his outlook. Potential red flags include cuts in hyperscaler capital expenditure plans, canceled contracts, or dropping GPU rental prices.
