AI doubts send AI stocks and chips tumbling, spark dip‑buying talk

AI doubts trigger sharp sell‑off across AI‑linked stocks, pushing chips and semiconductor ETFs into a steep dip. The 10‑year Treasury yield hit 5.36% earlier this month, raising borrowing costs for debt‑heavy firms. CoreWeave, a cloud‑computing renter for AI models, saw its bond yields climb above 15% and its shares tumble about 25% in a week, prompting Elon Musk’s “Yikes.” Deutsche Bank analyst Jim Reid warned that a shift to a cap‑ex cycle funded by debt makes credit spreads critical. OpenAI and Anthropic are both eyeing public listings, but Anthropic’s revenue rose 45% in Q3 versus Q2, slowing from the prior quarter’s triple‑digit jump, sparking valuation worries, noted Evercore ISI’s Nicholas Amicucci. The iShares Semiconductor ETF slipped 15% over nine consecutive sessions, though it remains 60% higher year‑to‑date. Meanwhile, consumer‑staple names such as Cava Group, Lululemon Athletica and Nike rallied, lifting the sector 5% for the week. Indexes diverged: Nasdaq fell 4.3%, S&P 500 dropped 1.9%, while the Dow edged up 0.5%. The iShares MSCI USA Momentum Factor ETF lost 8% across the week, its worst streak since July, as forced selling by AI‑focused hedge funds and rumors of another fund collapse intensified pressure. Warren Pies of 3Fourteen Research called the mood “fear in the air,” and Baird strategist Ted Mortonson highlighted opportunities in AI enablers like Microsoft and ServiceNow while recommending a defensive tilt toward Berkshire.

Context

Higher interest rates raise the cost of financing large AI projects, so investors watch credit spreads and earnings growth closely when deciding whether to buy the dip.