Doubts about AI investments

Doubts about the profitability of large investments in artificial intelligence have led to a stock market correction in the technology sector.

Meta's capital raise announcement

Meta, led by Mark Zuckerberg, announced on October 22 that it intends to launch a new capital raise to fund its substantial investments in AI, which fueled investor concerns about the sector's financial stability.

Technology stocks experience significant drop

The Nasdaq, which is rich in technology stocks, fell by 2.60%, its worst day since June, as investors sold everything related to AI. The S&P 500 lost 1.21%, while the Dow Jones remained stable.

Meta and other tech giants suffer losses

Meta's stock declined by 7%, erasing $124 billion in market capitalization in one session. Other major technology companies, such as Alphabet, Amazon, and Microsoft, also experienced significant declines.

AI-related companies face similar penalties

Nvidia, which produces the chips needed to run AI, saw its stock fall by 4.40%. Elon Musk's companies, SpaceX and Tesla, were similarly penalized, with their stocks dropping by 9.14% and 3.08% respectively.

Investors seek safer assets

U.S. Treasury bonds, which had been unattractive since the start of the year, suddenly found buyers as investors sought safer assets. The yield of ten-year bonds fell back to 5.07%.

Middle East tensions affect oil prices

Tensions in the Middle East pushed the price of crude oil to $113 per barrel, the highest level since May, adding to the economic uncertainty.

CoreWeave's financial troubles

CoreWeave, a company involved in building data centers optimized for AI, reported owing about $35.6 billion to its creditors by the end of June, according to a document submitted to the American securities watchdog (SEC).

Challenges in AI adoption

Despite the rapid adoption of AI, questions remain about the ability of these companies to profit from the massive investments required. The competition to take the lead in the AI race is intensifying.

Meta's fundraising and future IPOs

Meta's announcement of a capital raise coincides with the upcoming IPO of Anthropic and the ambitions of other competitors. Meta remains vague about the exact amounts, indicating a target of "several hundred billion dollars."