Investors are dumping AI hardware stocks like Nvidia and ASML in favor of enterprise software names as industry leaders signal a potential slowdown in AI development and high interest rates pressure capital-intensive projects.
ASML fell 9.5% as the AI capex slowdown narrative hit semiconductor equipment suppliers hard.
SoftBank Group dropped 10.7% in Tokyo as its AI-related investments were repriced lower.
Meta rose 7.12% as markets rotated into enterprise software names seen as less dependent on AI capex.
Nvidia fell 8.38% after AI chiefs called for slowing frontier model development, threatening demand for its chips.
Corning fell 7.5% as a supplier to the AI buildout chain, hit by the capex slowdown fears.
Arm Holdings slid 6% as the AI chip design company was caught in the hardware sell-off.
Marvell slid 6% as a data center chipmaker exposed to the AI capex rotation.
Samsung Electronics sold off 5% as AI memory names were hit by the capex slowdown fears.
South Korea's Kospi fell more than 3% driven by AI memory and semiconductor names.
Intel fell more than 5% as the chipmaker was swept up in the AI hardware sell-off.
Hewlett Packard Enterprise dropped more than 5% as an AI server vendor facing demand uncertainty.
CoreWeave slid 6% as a private AI cloud provider directly tied to the capex cycle.
Alphabet added 2.09% as it was viewed as a beneficiary of the rotation away from AI hardware suppliers.
Workday rose more than 2% as enterprise software names rallied on the rotation from AI hardware.
Adobe rose more than 2% as it was seen as a beneficiary of the shift away from AI capex plays.
Intuit rose more than 2% as software stocks gained on the AI hardware rotation.
Autodesk rose more than 2% as the market favored enterprise software over AI infrastructure.
Invesco QQQ Trust fell 1.23% as tech-heavy index was dragged down by AI hardware names.
Amazon slipped 1.74% amid the broader rotation out of AI hardware and capex-heavy names.
Microsoft held roughly flat as its diversified business offset AI capex concerns.
Global markets are undergoing a sharp rotation as investors pivot from AI hardware suppliers to enterprise software firms. The shift follows public calls from industry leaders, including Sam Altman and Elon Musk, to slow the pace of frontier AI development, sparking fears of a potential reduction in massive capital expenditure plans.
Stocks like Nvidia and ASML are declining due to concerns that AI industry leaders may slow the development of frontier models, which could lead to a reduction in the massive capital expenditures currently fueling the data center and chip buildout.
Investors are moving capital into enterprise software names like Adobe and Workday because these companies are perceived as less dependent on the continued, aggressive capital spending required for AI hardware infrastructure.