AI Stocks Drop 10 Percent Amid Infrastructure Spending Concerns

U.S. technology and AI-related stocks have fallen approximately 10 percent from their early October peaks. The selloff followed a market shake-out triggered by concerns over AI infrastructure spending, reported project delays from cloud hyperscalers, and the results of the U.S. midterm elections.

Fundstrat Global Advisors and other technical analysts warn that the market has not yet bottomed, noting a lack of technical exhaustion signals. While some indicators suggest stabilization, volatility is expected to persist for several weeks. Deutsche Bank attributed the latest selloff to a forced positioning unwind, while Carrick Lane reported a sharp decline in retail call buying for AI stocks during the election week.

Investors are now monitoring the upcoming initial public offering of Anthropic as a primary test of continued confidence in the AI boom. The instability has already impacted specific firms, with investors dumping shares and bonds of the Nvidia-backed infrastructure company CoreWeave.