The AI bubble is looking a little shaky
The market vibes are definitely off this Friday. Tech and AI-related stocks are taking a massive L, heading toward their worst week since July. The Nasdaq and S&P 500 dipped 2.4% and 1.3% respectively today, and chipmakers are getting hit even harder. The VanEck Semiconductor ETF, which follows the heavy hitters in the chip space, dropped 3.3% today and is down over 10% for the week.
Who is feeling the heat?
Individual tickers are bleeding out. SanDisk, AMD, and Micron saw their stock prices plunge between 5.7% and 6.7%. The real drama is happening with CoreWeave, an AI cloud provider that’s down 25% over the last five days after a 13.5% nosedive today. Short-sellers are having a field day, with those betting against the Philadelphia Semiconductor Index racking up $32 billion in paper gains this week alone.
Why it matters
It’s giving "crisis of confidence." The issue? Analysts are side-eyeing the massive debt companies are taking on to build out AI data centers. New data from Gartner suggests AI providers will dump $7 trillion into infrastructure by 2030, but might only pull in $3.6 trillion in revenue. That math is not mathing. With about a third of all AI capital expenditures funded by debt, financing is drying up—global AI debt issuance dropped from $113 billion in June to just $23 billion last month. Real talk: the era of making easy money on anything with "AI" in the name is likely over.
