Morning bid: Korean canary in the AI coalmine
SPY•Elice Group fell nearly 30% below its IPO price as South Korea’s KOSPI lost nearly 4%, while investors focused on rising AI infrastructure spending and this week’s hyperscaler earnings. Goldman Sachs expects five AI hyperscalers to lift combined capital expenditure to about $1.2 trillion next year.
1. AI spending in focus
South Korean AI infrastructure company Elice Group sank nearly 30% below its initial public offering price on Tuesday, while the tech-heavy KOSPI gauge lost nearly 4%. The rocky start for the startup cast a shadow over anticipated announcements by AI hyperscalers.
2. Spending and earnings
Goldman Sachs expects five AI hyperscalers to increase combined capital expenditure to about $1.2 trillion next year. Investors are questioning whether AI spending will earn more than it costs to finance, said Ninghui Liu of State Street Investment Management. Meta Platforms was due to report Wednesday.
3. Markets and data ahead
Oil prices resumed their climb amid uncertainty over a possible US waiver of sanctions on some Russian energy exports and fresh Middle East violence. The article also cited upcoming earnings from Netflix, SpaceX, General Motors, Hasbro, Halliburton and 3M, and forecast September US housing starts of 1.305 million.
