AI rout slows as investors buy the dip on tech
QQQ•A selloff in AI-related stocks eased on Thursday as buyers returned to the tech sector and bond yields declined. CoreWeave shares fell 2% at midday after dropping as much as 10% earlier, while Dell fell 7% and Nebius fell 5%.
1. Selloff eases
The market rout centered on riskier AI-related borrowers moderated on Thursday after a weak U.S. open, as buyers returned to tech stocks and bond yields declined. CoreWeave fell 2% at midday after dropping as much as 10% earlier; it had lost 15% on Wednesday.
2. Borrowing costs weigh
CoreWeave bonds traded at yields as high as 16%, and its credit default swap spreads widened. Dell Technologies fell 7%, Nebius declined 5% and Sandisk lost 2%. Some investors said rising rates and expectations of further Federal Reserve tightening could add volatility to the AI infrastructure buildout.
3. Growth concerns persist
Some investors cited concerns that business may be slowing at Anthropic and OpenAI. An investor who attended a meeting with Anthropic leadership said its third-quarter revenue rose 45% to $16.8 billion from the previous quarter; some analysts said the figure disappointed given sector expectations. Investors remained generally sanguine about the sector's largest players, which include Nvidia and the hyperscalers.
