Nvidia, Micron and AMD fell in premarket trading on Thursday as a global AI and chip sell-off deepened. Investors worry that higher borrowing costs could weigh on AI infrastructure spending, while one analyst calls the pullback a buying opportunity.
Nvidia, Micron and AMD all fell in premarket trading on Thursday, as AI stocks across the globe extended a slide that has wiped over $1 trillion from their market caps this week. Nvidia lost 1.8%, Micron 4.4% and AMD 3.5%.
Neoclouds dropped too. CoreWeave was down 5.3% and Nebius 4%, while Oracle traded 2% lower.
Chip stocks slide across Asia and Europe
The sell-off in technology hardware also deepened across Asia and Europe. SK Hynix plunged more than 10% and Samsung Electronics fell 8.73%. In Japan, SoftBank Group tumbled 7.9% and Advantest plunged almost 14%.
In Europe, ASML was last down 6.6%, Infineon Technologies shed 9.4% and ASM International fell 9.6%. TSMC fell 1.81%.
Financing fears and rate worries drive the drop
Investors are growing concerned that higher borrowing costs could weigh on the capital spending needed to build out AI infrastructure. Broadcom and Intel chief executives warned on Monday that financing could become a major headwind, according to CNBC.
On Wall Street, tech shares led losses on Wednesday after hotter-than-expected U.S. inflation data fueled concerns that the Federal Reserve could raise interest rates further. The Nasdaq Composite dropped 1.88% to close at 26,692.87, while the S&P 500 shed 1.11%.
Analyst sees a buying opportunity
Dan Ives of Yorkville Ives said the pullback reflects financing worries as Treasury yields climb above 5%. He said demand for AI computing power remains robust. According to CNBC, Ives wrote: "rates are a financing question, not a demand question".
He added that the latest pullback presents a buying opportunity. He pointed to potential cuts in hyperscaler capital expenditure plans, canceled contracts or falling GPU rental prices as warning signs.
Source: CNBC
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