U.S. stock markets recently experienced a downturn, with the Nasdaq heading for its largest monthly drop since March 2025, and the S&P 500 also facing a significant decline. This market volatility stemmed from growing concerns about artificial intelligence, impacting technology stocks despite substantial investments in AI technology. Worries about high valuations and uncertain returns from these massive AI expenditures, alongside inflation data and tariff uncertainties, contributed to the selling pressure. However, Felix Brill, CIO of VP Bank, suggests this software sell-off might be overblown, asserting that the underlying AI trade remains robust.
Despite market jitters, major AI players continue to attract significant capital and report strong demand. OpenAI, for instance, secured a substantial $110 billion investment, valuing the company at $730 billion pre-investment. This funding round saw major contributions, including $30 billion from SoftBank, $30 billion from NVIDIA, and $50 billion from Amazon. The capital aims to scale infrastructure and distribution to meet the surging demand for AI, with OpenAI's ChatGPT boasting over 900 million weekly active users and Codex reaching 1.6 million weekly users.
The demand for AI infrastructure components is also driving record performance for suppliers. Broadcom is experiencing a significant backlog for its AI chips, leading Wall Street analysts to anticipate accelerating AI-driven sales. Similarly, Dell reported record orders, shipments, revenues, and backlog in its fourth quarter, largely fueled by strong demand for AI infrastructure. Dell's AI server revenue alone neared $9 billion in Q4, with its AI server business projected to grow 103% in fiscal year 2027, serving over 4,000 customers.
Companies like Alphabet, the parent company of Google, are also solidifying their positions in the AI space. Alphabet is highlighted as a top AI stock pick for 2026, leveraging its comprehensive AI technology stack, including Gemini models and custom Tensor Processing Units (TPUs). This in-house chip capability provides a cost advantage and boosts its core search business. Furthermore, India's Yotta Data Services is building a $2 billion AI hub utilizing NVIDIA's GPUs, addressing the high demand for these chips in India and contributing to the nation's native AI infrastructure development.
Investment strategies are evolving alongside AI advancements. Etna Capital Management introduced a new framework, "Beyond Benchmarks," emphasizing research-led AI investing and focusing on system-level execution, integration into real workflows, and sustained scalability rather than just model accuracy. Meanwhile, a new "HALO" (Heavy Assets, Low Obsolescence) investment strategy is gaining traction on Wall Street, favoring companies with substantial physical assets like grids and pipelines, which are perceived as less vulnerable to AI disruption, leading to a rotation into "old economy" sectors.
Key Takeaways
- U.S. stock markets, particularly the Nasdaq and S&P 500, experienced significant declines driven by AI concerns, high valuations, and uncertain returns from AI investments.
- OpenAI secured a $110 billion investment at a $730 billion pre-investment valuation, with major contributions from SoftBank ($30B), NVIDIA ($30B), and Amazon ($50B).
- OpenAI's funding aims to scale AI infrastructure and distribution, supported by ChatGPT's over 900 million weekly active users and Codex's 1.6 million weekly users.
- Broadcom has a substantial backlog for AI chips, indicating accelerating AI-driven sales and planned infrastructure buildouts by major cloud providers.
- Dell reported record Q4 orders and nearly $9 billion in AI server revenue, projecting 103% growth for its AI server business in FY27 due to strong AI infrastructure demand.
- Alphabet (Google) is identified as a top AI stock pick for 2026, leveraging its Gemini models, custom TPUs, and AI integration into its core search business.
- India's Yotta Data Services is building a $2 billion AI hub with NVIDIA GPUs to meet high demand and develop native AI capabilities in India.
- MARA Holdings partnered with Starwood to expand into AI data centers, while CoreWeave faced a 12% stock drop due to wider-than-expected losses.
- Etna Capital Management released a new framework emphasizing research-led AI investing, focusing on system-level execution and real-world integration over traditional benchmarks.
- A "HALO" (Heavy Assets, Low Obsolescence) investment strategy is gaining traction, favoring companies with substantial physical assets less vulnerable to AI disruption.
US stocks dip as AI worries hit tech, Nasdaq faces big monthly loss
U.S. stock futures fell on Friday due to concerns about artificial intelligence, impacting technology stocks. The Nasdaq is heading for its largest monthly drop since March 2025. Investors are also waiting for important inflation data. Technology stocks have been very unstable this month because of AI worries, even as companies spend a lot on AI technology. Uncertainty about tariffs also added to the market's ups and downs.
Stock futures drop on AI fears, Nasdaq set for steep monthly loss
U.S. stock futures declined on Friday as growing concerns about artificial intelligence (AI) affected tech stocks. The Nasdaq is on track for its biggest monthly loss since March 2025, while investors await key inflation data. Technology stocks experienced significant volatility this month due to AI concerns, despite massive spending on AI technology. Trade tensions also contributed to market instability, especially after new tariff announcements. Companies like Nvidia, Zscaler, and Intuit saw stock price changes amid these market shifts.
US stocks slide on AI fears, Nasdaq faces biggest monthly drop since March 2025
U.S. stock indexes fell on Friday as worries about artificial intelligence (AI) hit technology stocks hard. Both the Nasdaq and S&P 500 are expected to have their steepest monthly decline since March 2025. Higher than expected inflation data also negatively impacted market sentiment. Concerns about high valuations and the uncertain returns from massive AI investments by big tech companies fueled selling pressure. Tariff uncertainty also added to market volatility.
OpenAI secures $110 billion investment at $730 billion valuation
OpenAI has announced a significant new investment of $110 billion, valuing the company at $730 billion before the investment. Major partners like SoftBank, NVIDIA, and Amazon are contributing substantial amounts. This funding aims to address the growing demand for AI by scaling infrastructure, distribution, and capital. OpenAI's products like ChatGPT and Codex are seeing massive user growth, with over 900 million weekly active users for ChatGPT and 1.6 million weekly users for Codex. The company is focusing on infrastructure as the key to future AI competition.
OpenAI raises $110B for AI expansion with Amazon and NVIDIA
OpenAI announced a $110 billion investment at a $730 billion valuation to meet the surging demand for artificial intelligence. The funding comes from major partners including $30 billion from SoftBank, $30 billion from NVIDIA, and $50 billion from Amazon. These partnerships will expand global reach and deepen infrastructure for delivering advanced AI to more users and businesses. The investment supports OpenAI's mission to ensure artificial general intelligence benefits all of humanity, with the OpenAI Foundation's stake now valued over $180 billion.
Broadcom's AI chip backlog boosts Wall Street forecasts
Broadcom's significant backlog for AI chips is leading Wall Street analysts to re-evaluate their forecasts. Oppenheimer suggests that AI-driven sales growth for Broadcom is accelerating and could surpass first-quarter estimates. Major cloud providers are heavily investing in infrastructure to train and run large language models, and Broadcom supplies essential components like custom chips and data center networking. This strong demand indicates a planned buildout rather than experimental spending, making Broadcom's backlog a concrete signal of real AI budgets.
MARA, Block rally; CoreWeave drops on margin pressure
MARA Holdings stock rose 16% in pre-market trading after announcing a partnership with Starwood to expand into AI data centers. Block surged 20% after revealing plans to cut over 40% of its workforce. CoreWeave, however, dropped about 12% due to wider-than-expected quarterly losses and weaker revenue guidance. These mixed results highlight the divergence between companies expanding in AI and those facing margin pressures. Miners are also shifting focus to monetize power access amid rising AI compute demand.
Dell reports record orders driven by AI demand
Dell experienced record orders, shipments, revenues, and backlog in its fourth quarter, largely due to strong demand for AI infrastructure. The company's AI server revenue alone reached nearly $9 billion in Q4, and its AI server business is projected to grow 103% in FY27. Dell is managing supply chain tightness and pricing resets caused by unprecedented AI demand. Over 4,000 customers are driving $64 billion in AI-related revenue for Dell, with executives highlighting lessons learned from past supply chain challenges to improve resilience.
VP Bank CIO: Software sell-off overblown, AI trade continues
Felix Brill, CIO of VP Bank, believes the recent sell-off in software stocks is excessive and that the AI trade still has strong potential. He argues that structural demand continues to support the AI market. Brill also discussed why Japan might have an advantage over South Korea based on risk and policy factors. His perspective suggests that the underlying drivers for AI investment remain robust despite short-term market fluctuations.
Etna Capital Management releases AI investing framework
Etna Capital Management has released a new research framework called 'Beyond Benchmarks: A Research-Led Framework for Evaluating AI Companies (2026 Edition)'. This framework highlights the growing importance of research-led AI investing as automation accelerates and technical changes shorten market cycles for AI companies. Traditional performance benchmarks are becoming less useful, with investors now focusing on how AI can be integrated into real workflows, sustained at scale, and operated under real-world constraints. The framework emphasizes system-level execution over just model accuracy.
Alphabet: Wall Street's top AI stock pick for 2026
Alphabet is highlighted as a top AI stock for 2026 due to its comprehensive AI technology stack, including its Gemini models and custom Tensor Processing Units (TPUs). The company benefits from a cost advantage with its in-house AI chips and uses AI to boost its core search business, which has a dominant market share. Alphabet is also exploring revenue growth by allowing select customers to use its TPUs. Its strong position in AI, combined with its control over key internet platforms like Chrome and Android, makes it a significant player in the AI landscape.
India's Yotta building $2B AI hub with NVIDIA GPUs
India's Yotta Data Services is constructing a $2 billion AI hub utilizing NVIDIA's GPUs, addressing the high demand for these chips in India. The company currently holds a significant portion of India's GPU capacity and plans to fund further GPU purchases through a pre-IPO round. This initiative is part of India's broader effort to develop native AI capabilities and infrastructure. Yotta's expansion is supported by major tech companies increasing their data center investments in India.
HALO trade: Heavy Assets, Low Obsolescence gains traction on Wall Street
A new investment strategy called 'HALO' or 'Heavy Assets, Low Obsolescence' is gaining popularity on Wall Street. This strategy favors companies with substantial physical assets like grids and pipelines, which are seen as less vulnerable to AI disruption. Sectors like energy and materials are performing well under this trend, while tech stocks have struggled. Investors are rotating into these 'old economy' companies, believing they offer stability and potential growth even as AI technology advances.
Sources
- US stock futures falter on AI jitters, Nasdaq braces for steep monthly fall
- Stock futures fall on AI concerns, Nasdaq set for steep monthly loss
- US stock futures falter on AI jitters, Nasdaq braces for steep monthly fall
- OpenAI Announces $110 Billion Fundraise At $730 Billion Valuation
- Scaling AI for everyone
- Broadcom’s AI Chip Backlog Has Wall Street Rechecking Its Forecasts
- Pre-market movers: MARA and Block rally while CoreWeave tumbles on margin pressure
- Dell's 4,000 AI customers spend $64bn in FY26
- Software sell-off overblown, AI trade still has legs: VP Bank CIO
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- The new anti-AI trade sweeping Wall Street: 'HALO'
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