The total market value of the world's top 20 AI and chip stocks has evaporated by more than 1 trillion US dollars.
Expectations of interest rate hikes, rising AI financing costs and a deteriorating competitive landscape have converged this week, pushing global tech stocks into a massive sell-off.
The sell-off in global tech stocks continued on Thursday. In the US stock market, Nvidia closed 1.84% lower that day, AMD fell 1.5%, Intel dropped about 2.8%, and Dell Technologies plummeted 6.8%. The decline was even more severe in Asian markets: SK Hynix tumbled more than 10% in a single day, Samsung Electronics fell 8.73%, and SoftBank Group Corp. of Japan plunged 7.9%.
According to CNBC statistics, as of this Thursday, the total market value of the world's 20 largest AI and semiconductor stocks has evaporated by more than 1 trillion US dollars. The iShares Semiconductor ETF (SOXX), which tracks the chip sector, recorded its eighth consecutive trading day of decline on Thursday, with a cumulative drop of about 12.7% over the period. According to Dow Jones Market Data, this is the longest consecutive losing streak for the ETF in 11 years.
Jensen Huang, CEO of Nvidia, told Bloomberg when attending an event in Stockholm that he does not believe Nvidia needs to endorse CoreWeave, adding that "their cost of capital is actually going down". This remark drove the new cloud computing (neocloud) stocks to rebound intraday, with CoreWeave closing up 5.94% and Nebius rising 1.29%.
Multiple negative factors superpose, and the sell-off logic progresses layer by layer
This round of sell-off was not triggered by a single event, but by multiple negative clues reinforcing each other within the same time window.
Inflation data was the trigger. The US September Consumer Price Index (CPI) released on Wednesday was higher than expected, and the market immediately increased bets on further interest rate hikes by the Federal Reserve. The Nasdaq Composite Index closed 1.88% lower at 26692.87 points on Wednesday, and the S&P 500 Index fell 1.11% to 7718.94 points.
Anthropic's data added further downward pressure to market sentiment. According to a report by the Financial Times of the UK, AI startup Anthropic disclosed at a private investor meeting on Wednesday that its third-quarter revenue reached 16.8 billion US dollars, a quarter-on-quarter increase of about 50% — but this growth rate is far lower than the roughly 145% quarter-on-quarter increase in the second quarter. Gil Luria, an analyst at D.A. Davidson, wrote in a client report: "The market seems to interpret Anthropic's update as a negative signal, and this reaction is understandable given that the market is already highly sensitive to AI trades."
Luria himself holds a more neutral view on this. He pointed out that Anthropic achieved positive cash flow in the third quarter, which shows that the company and OpenAI "do not have inherently unprofitable business models". He also wrote that from a more macro perspective of the AI industry, "the overall AI usage (and AI spending) does not necessarily slow down".
Competition from China is fermenting at the same time. ChangXin Memory Technologies announced last weekend that it has made a breakthrough in a new architecture that can store more data in a smaller space. Elon Musk immediately posted on the X platform that China will produce "a large number of memory chips" in 2028.
Meanwhile, the CEOs of both Broadcom and Intel warned this Monday that financing issues could become a major obstacle to AI expansion. Hock Tan, CEO of Broadcom, said this challenge could even exceed chip or power shortages.
Rising interest rates directly impact the return on investment in AI infrastructure
The impact of the high interest rate environment on AI infrastructure construction is one of the core logics of this round of sell-off.
James Vrachas, executive director of investment bank Post Oak Group, told MarketWatch that chip stocks have "priced in a lot of future growth expectations", and the stock prices themselves already reflect these expectations. In this context, "a slight shift in sentiment or questioning of spending will have a significant impact on stock prices". He said: "Believing in the long-term potential of AI and believing that every company benefiting from this growth is reasonably priced are two different things."
Ross Mayfield, investment strategist at Baird, pointed out to MarketWatch that the rise in Treasury yields is putting pressure on the chip sector, especially high-growth stocks and companies that are on the more aggressive end of the "AI risk spectrum" and more dependent on external financing. He said that CPI data may increase the urgency of the Federal Reserve to raise interest rates, "which puts huge pressure on short-term interest rates, and has a particularly direct impact on borrowers with weak financial foundations or floating-rate debts linked to short-term interest rates".
Mayfield also pointed out that even hyperscalers, the large-scale cloud service providers, are not completely immune to interest rates. "Even the largest and most cash-rich companies must re-evaluate the return on investment of these projects," he said. "Most of the market's momentum is built on the spending of hyperscalers on hardware and data center infrastructure, which casts a shadow over the entire supply chain."
The decline is deeper in the Asian and European markets, with South Korean and Japanese stock markets bearing the brunt
The sell-off sentiment in the US stock market quickly spread to Asian and European markets, and the decline generally exceeded that of the US stock market.
On Thursday, South Korea's SK Hynix tumbled more than 10% in a single day, Samsung Electronics fell 8.73%, LG Innotek dropped 8.95%, Seoul Semiconductor fell 9.28%, and Samsung SDI declined 6.26%. The Korea Composite Stock Price Index (KOSPI) approached its lowest closing level since April.
The Japanese market also plunged sharply. SoftBank Group fell 7.9%, Advantest, a semiconductor testing equipment manufacturer, plummeted nearly 14%, Tokyo Electron, a chip manufacturing equipment supplier, fell 6.45%, Renesas Electronics dropped 8%, and TSMC fell 1.81%.
In Europe, Dutch semiconductor equipment giant ASML fell slightly, Infineon dropped 5%, and ASM International fell 7%.
Analyst: Demand signal is the real alarm line
Despite the sluggish market sentiment, some analysts believe that this round of sell-off has not yet touched the substantial deterioration of AI demand.
Dan Ives, technology analyst at Yorkville Ives, wrote in a report that this round of sell-off reflects the market's concerns about financing costs, not doubts about AI computing power demand. "The rise in US Treasury yields above 5% has indeed pushed up the financing cost of these infrastructure projects. It is reasonable for investors to pay attention to balance sheets and contract structures, but interest rates are a financing issue, not a demand issue."
Ives believes that the current is a buying opportunity, and says that the AI infrastructure boom is still in its early stage. He clearly listed the signals that are really worth vigilance: "What will really change our judgment is the demand signal, not the interest rate signal" — including hyperscalers cutting capital expenditure plans, contract cancellations or falling GPU rental prices.
Hendi Susanto, portfolio manager at Gabelli Funds, told MarketWatch that many chip and semiconductor equipment companies "still have solid balance sheets and abundant free cash flow". He expects most of these companies "to end this year on a strong note", especially those whose demand still exceeds supply. He also pointed out that the upcoming earnings season of technology companies will reveal "to what extent investors have priced in inflation concerns".
This article does not constitute personal investment advice and does not represent the position of the platform. The market is risky, investment needs to be cautious, please make independent judgments and decisions.
This article is from the WeChat official account "Wall Street CN Max", author: Long Yue, authorized for release by 36Kr.