Turmoil hits AI buildout as neoclouds face pressure, credit risks mount and Solidigm pulls IPO
Source: CNBC ·
Stock slumps, pulled IPOs and rising spreads on credit default swaps this week sets stage for hyperscaler earnings.
From the source
Neoclouds tanked. Credit default swaps soared. Meta turned cash flow negative. And SK Hynix's Solidigm unit canceled plans for its initial public offering. It's been a rocky week for the AI infrastructure trade. The Nasdaq followed Thursday's beating with an additional drop on Friday to end the week down 0.7%. Among the hyperscalers, the worst performer was Alphabet , shares of which sank 6% ahead of the internet giant's third-quarter earnings report next week. Microsoft and Amazon are also on the docket, and they each saw shares fall less than 1%. 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. CoreWeave, the leader of the pack, has seen spreads on its CDS widen past 11%, generally viewed as a distress level, as investors have to pay up for protection…