AI Stocks Waver as Nvidia, CoreWeave Jolt Markets

AI stocks pulled back as U.S. equity futures edged lower, with Nvidia under pressure after SoftBank sold its entire stake and CoreWeave warned revenues will miss expectations. By 8:25 a.m. New York time, S&P 500 futures were down 0.3% and Nasdaq 100 futures fell 0.5%, a day after the tech-heavy index logged its biggest gain in nearly six months.

The move reflected a reset in risk appetite toward high‑priced technology leaders. Nvidia slipped in premarket trading, dragging the Magnificent Seven, while CoreWeave sank about 10% before the bell. The dollar was little changed. Cash Treasuries were closed for Veterans Day. European stocks advanced, and Asia was mixed.

AI stocks wobble as Nvidia, CoreWeave rekindle valuation worries

SoftBank Group Corp. unloaded its Nvidia stake, booking roughly $5.83 billion. “I can’t say if we’re in an AI bubble or not,” Chief Financial Officer Yoshimitsu Goto told investors, adding the proceeds would be used “for our financing,” without elaborating. The divestment sharpened focus on how concentrated AI stocks remain and how sensitive they are to big-ticket flows.

CoreWeave, a key renter of access to advanced AI chips, guided to lower-than-expected revenue. For investors, this introduced a fresh note of caution about downstream demand in the AI supply chain. AI stocks have been rewarded for relentless growth; any hint of deceleration can compress multiples quickly.

Helen Jewell, CIO of EMEA fundamental equities at BlackRock, put it this way on Bloomberg TV: “The valuations don’t look crazy, but they do if there’s nervousness on the growth story. We remain bullish on the AI story… but it is likely to be a volatile ride.”

Market snapshot

• S&P 500 futures: -0.3%
• Nasdaq 100 futures: -0.5%
• Dow Jones futures: little changed
• Stoxx Europe 600: +0.7%
• MSCI World Index: +0.2%
• Dollar index: little changed
• Euro: +0.3% to $1.1593
• British pound: little changed at $1.3169
• Japanese yen: +0.2% to 153.80 per dollar
• Bitcoin: -1.2% to $104,343.01
• Ether: +0.4% to $3,555.63
• Germany 10-year yield: -1 bp to 2.66%
• UK 10-year yield: -8 bps to 4.38%
• WTI crude: +0.7% to $60.55
• Spot gold: +0.7% to $4,142.90

Short‑term sentiment remains fragile. AI stocks rallied hard into Monday, and the pullback reflects profit‑taking as investors weigh whether earnings momentum can keep pace with elevated valuations.

What’s driving the move

• SoftBank’s exit: A complete sale of Nvidia raises questions about positioning and redeployment of capital, stoking debate on whether mega‑cap AI stocks face ownership concentration risk.
• CoreWeave’s warning: A softer revenue outlook suggests uneven demand across the AI stack, from compute infrastructure to end‑market workloads.
• Macro pivot points: Upcoming jobs and inflation prints could shift the outlook for Federal Reserve rate cuts, influencing discount rates applied to growth equities, including AI stocks.

Leon Goldfeld of JPMorgan Asset Management summed up the tape: “Markets are right now going through a bit of a consolidation phase.” For AI stocks, consolidation often translates to wider intraday swings and sharper reactions to headlines.

Context: Post-shutdown relief trade and the Fed

With the U.S. government shutdown expected to end on Wednesday, some investors see room for a relief bid. Historically, the S&P 500 gained an average of 2.3% in the month after prior shutdown resolutions, per CFRA strategist Sam Stovall. Still, BNY’s Geoff Yu cautioned that “it will be about data, earnings, and the Fed, and investors will remain on the defensive until there is clarity on all factors.”

That framing matters for AI stocks. If labor and inflation data nudge the Fed toward additional cuts, long-duration assets could benefit. If the data run hot, higher-rate expectations could challenge premium multiples.

Europe firmer, Asia mixed; pound slips on jobs

European equities advanced, while Asian markets delivered a mixed close. In FX, the pound softened after UK unemployment rose more than expected, leading traders to increase bets on a Bank of England rate cut next month. Lower UK yield expectations pushed gilt yields down eight basis points to 4.38% on the 10‑year.

Commodity markets were constructive, with crude and gold both up 0.7%. For AI stocks, stronger gold can reflect caution, while cheaper oil typically supports consumer and transport shares, balancing sector rotations.

Corporate movers and highlights

• Nvidia: Shares dipped about 1.7% after SoftBank’s full exit, weighing on AI stocks and megacap peers.
• CoreWeave: The AI infrastructure provider dropped roughly 10% premarket on a revenue warning, rattling risk appetite across AI stocks.
• Sony Group Corp.: Jumped 5%+ after raising its profit outlook.
• Xpeng Inc.: Rallied to an eight‑month high on optimism around robotics and EV technology advances.
• Rocket Lab: Gained 13% after revenue beat consensus.
• Gemini Space Station: Fell 8.8% after a larger‑than‑expected loss in its first report as a public company.
• Toyota Industries Corp.: Elliott Investment Management built a significant stake, arguing its proposed privatization price is too low.
• Meta Platforms: FT reports chief AI scientist Yann LeCun plans to launch a startup.

The cross‑currents underscore a key theme: while AI stocks dominate headlines, breadth across cyclicals and selective growth names continues to matter for index resilience.

Valuation check: Long runway, choppy path

The AI buildout is tangible—from hyperscale capex to enterprise pilots—yet the path is uneven. AI stocks remain geared to three questions:

• Can revenue from AI‑driven workloads scale as fast as capex?
• Will margins hold as competition and input costs evolve?
• How sensitive are AI stocks to higher real yields or a slower macro backdrop?

Until investors have clearer answers, AI stocks are likely to swing on micro headlines (supplier guidance, customer uptake) and macro catalysts (CPI, payrolls, Fed rhetoric).

Global crosswinds and what to watch next

• Data: U.S. jobs and inflation figures will shape expectations for Fed cuts.
• Earnings: Guidance from chip suppliers, cloud providers, and enterprise software will test the depth of AI demand.
• Flows: Positioning in AI stocks—particularly in options—could amplify moves around key dates.
• Policy: Any change in export controls or industrial policy could alter supply chains and demand pacing.

For now, buyers and sellers are trading the same story from opposite ends: believers in a multi‑year AI cycle versus skeptics worried about decelerating growth and rich multiples. That tension will keep AI stocks at the heart of the market narrative.

Currencies, crypto, bonds, and commodities: The macro backdrop

A steady dollar and lower developed‑market yields offer a modest tailwind to risk. Crypto diverged, with Bitcoin down 1.2% and Ether up 0.4%. Oil’s gain can reflect supply dynamics; gold’s bid suggests hedging into data risk. All told, the backdrop is mixed but not hostile, leaving stock‑specific news—especially around AI stocks—to set the tone.

Bottom line

A pair of headlines—SoftBank stepping away from Nvidia and CoreWeave trimming its outlook—was enough to cool the week’s opening rally. Futures are softer, and leadership is in question. The AI story remains intact but volatile, and AI stocks will likely trade headline to headline until earnings and macro data reassert direction.

If inflation eases and guidance holds, AI stocks could regain momentum into year‑end. If growth wobbles or rates back up, the trade may continue to consolidate. Either way, risk management—not conviction alone—looks set to drive positioning.

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Article Source: Bloomberg