Tech Slides on AI Fears - Tech Roundup

Shares of technology companies plunged as concerns about the outlook for the artificial-intelligence boom resurfaced.

The Nasdaq Composite saw its biggest intraday slide since June, losing almost 3% of its value at one stage.

Shares of Meta Platforms fell by more than 7% as traders looked askance at its aggressive data-center investment plans. Investors initially embraced the Facebook owner's plan to issue a new class of nonvoting shares to fund AI infrastructure spending.

Semiconductor equipment maker Lam Research sparked a selloff in the semiconductor sector after executives warned that chip makers and companies like Lam were constrained by supply shortages, despite robust AI-driven demand. That caused a rout in Asian stock markets overnight with more selling in South Korean memory chip makers Samsung and SK Hynix, two major suppliers for hyperscalers. Among other AI chip makers, shares of Nvidia fell by more than 4%. The PHLX "SOX" Semiconductor Sector index slid by 6.7%.

One strategist said AI is very different to the software business where companies like Microsoft and Meta were able to keep profit margins high and capital needs low. "The model developers have massive computing bills, while the infrastructure providers spend heavily on chips and data centers," said Lorenzo Di Mattia, founder and chief investment officer at Sibilla Capital. "Investors may be expecting the profits of the old software model while funding a spending race with no clear finish line."

The companies that sold off the most heavily Thursday were among those leading in the spending race. CoreWeave, the cloud-computing firm whose credit quality has come into question because of the scale of its data-center borrowing, fell by 10%.

Shares of Oracle, another cloud-computing and software firm that has borrowed billions of dollars at a time when rates are rising, fell by roughly 3%. Oracle has lost roughly half its value since June and is only about 10% above its lows of the year.

Earlier this week, Ken Griffin, chief executive of hedge fund firm Citadel said investors were "almost certainly in an AI bubble." Bullish investors argue that CoreWeave and other highly indebted "neocloud" companies are relatively small and earnings growth potential for AI companies remains large.

Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

October 22, 2026 17:30 ET (21:30 GMT)