Nasdaq enters correction as Intel plunges 29% after Amazon, Google earnings
For the chief financial officer of a regional bank
The Nasdaq slid into correction territory on Friday as investors unwound AI bets, according to Semafor's Nov. 1 report.1
Semafor reported that concerns grew over hyperscaler spending after disappointing Amazon and Google earnings; the report does not give the earnings figures or say what disappointed.1 A strategist told Bloomberg that earnings misses are generating "sober questions" about the AI investments powering the economy, per Semafor; the strategist was not named in the report.1
Intel stock fell 29%, the chipmaker's biggest single-day selloff since the 1970s, according to Semafor.1
S&P Global revised Meta's outlook to "negative," citing its high capex, Semafor reported.1
A portfolio manager told the Financial Times, "You can't find the growth slowdown in any of the economic data." Semafor did not name the portfolio manager.1
Semafor reported that some investors are dialing back their expectations for US economic growth, as warning signs flashed over the sustainability of the country's AI buildout; the sources for this story are limited to that single secondhand report.1
S&P Global's negative outlook on Meta treats heavy AI capex as a credit risk, which matters for banks that lend to or underwrite hyperscalers and data center builders. Executives may want to review exposure to AI-linked borrowers and suppliers, since the market is now questioning the spending that supported them.
Our take. The economic data shows no slowdown yet. The stock market already does. If your loan book or AI vendor contracts assume the buildout keeps its pace, Friday was the stress test you didn't run.
Action. Credit risk: Stress-test data-centre and semiconductor borrower exposures against a scenario where hyperscaler capex slows.