AI Stocks Plunge Amid Bubble Fears Despite Strong Earnings

Artificial intelligence stocks experienced a significant sell-off, with some shares declining 20% to 40% from their peaks. The downturn stems from investor anxiety regarding the financing of AI infrastructure and growing fears that the sector has entered a market bubble.

Despite the broader market decline, several key infrastructure providers reported strong financial results. Micron Technology posted record quarterly revenue of $41.46 billion and announced that its high-bandwidth memory is sold out through 2026, supported by $100 billion in take-or-pay contracts.

Other hardware and cooling firms also showed growth. Astera Labs reported a 104.5% year-over-year increase in second-quarter revenue and launched Orion, a new rack-scale architecture. Vertiv Holdings exceeded third-quarter estimates and raised its full-year net sales guidance to between $13.5 billion and $14 billion, while expanding its operations through the acquisition of liquid-cooling specialists and a microgrid developer.