AI Stocks Selloff: $80 Billion Wiped Out on Hot Inflation

The ai stocks selloff that swept Wall Street on Wednesday erased roughly $80 billion of market value, as a hotter-than-expected inflation reading revived fears that borrowing costs will stay high for the capital-hungry artificial intelligence sector.

CoreWeave led the retreat, falling about 15-16%, while Nebius dropped roughly 10-11%, Oracle slid around 9% and Dell sank about 11%. The selling spread quickly beyond the AI trade’s hardest-hit names, dragging the broader market lower.

Nasdaq’s Steepest Drop in Nearly Three Months

The damage was broad. The S&P 500 fell 1.1%, its worst session since late July, while the tech-heavy Nasdaq slid 1.9% — its sharpest single-day decline in nearly three months.

The logic behind the AI rout is straightforward: companies building out data centers and AI infrastructure are pouring billions into capital spending, much of it funded with debt. Stickier inflation raises the odds of further rate hikes, making that debt more expensive and squeezing the economics of the AI boom.

Investors Flee to Safety

In a telling sign of nerves, Treasury yields retreated after an initial spike as investors sought the safety of government bonds, according to Reuters’ markets column — a classic flight-to-quality move on a day when risk assets came under pressure.

The selloff is a reminder of how exposed the AI trade has become to the inflation picture. After months of riding AI enthusiasm to new highs, the market is once again hostage to the next inflation print — and the next move from the Fed.

Source: Reuters