Nvidia · Meta · Wall Street · Jensen Huang · CNBC Technology
Turmoil hits AI buildout as neoclouds face pressure, credit risks mount and Solidigm pulls IPO
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Credit default swaps soared.
Key facts
- Meta saw its stock plunge 7% on Thursday after the company reported negative free cash flow in the third quarter of over $2 billion while raising the floor of its full-year capex to $135 billion
- CDS on Nvidia and Oracle also touched records, with their spreads hitting 126 basis points and 343 basis points, respectively, this week
- SK Hynix purchased Solidigm, which makes NAND and SSD storage for data centers, from Intel in 2021
- Analysts at research and advisory firm Gartner predict that 80% of neocloud companies will either cease operations or be absorbed by 2030
Summary
The Nasdaq followed Thursday's beating with an additional drop on Friday to end the week down 0.7%. While the tech market has thus far avoided a dramatic across-the-board sell-off, the artificial intelligence build-out is showing signs of strain. Shares of neoclouds CoreWeave, Nebius and IREN all fell sharply this week, bringing their losses for October to well over 30% each. "What investors are doing is throwing every baby out with the bathwater and saying anyone who is a neocloud" will be devalued, Roundhill Investments CEO Dave Mazza told CNBC's "Squawk on the Street" on Thursday.