There’s a full-blown meltdown in the AI boom’s supporting cast of speculative, volatile stocks
Nvidia’s results weren’t good enough to help the chip designer, but the reaction has been so much worse for other parts of the AI trade. The meltdown in the AI boom’s supporting cast of more speculative, volatile stocks is deepening sharply on Friday:
Bitcoin miners turned data center providers Cipher Digital and IREN are in a world where the market seems to have soured on everything they’re associated with. Shares of both have tumbled more than 7% on the day.
Neoclouds CoreWeave and Nebius are both off about 5% or more. The former is now 66% off its record closing high, while the latter is in a 40% drawdown.
Nuclear energy firm Oklo is down 8%, and has lost over half its value since mid-October. Its trailing price-to-sales ratio remains aggressively unchanged through this rout (because it is a zero-revenues company).
The Bloom (Energy) is off the rose, with the fuel cell company off more than 40% from its peak. Shares of Bloom Energy are cratering amid bearish options activity, with its put/call ratio at a four-month high as of 10:55 a.m. ET.
The rollover in these speculative pockets of the market (as well as bitcoin!) starting in October seems to have presaged the current bout of pain for major US indexes.
To repeat myself, when the question of, “Oracle will be able to pay me back, right?” enters your mind, that’s probably not consistent with a world where smaller companies on the outskirts of the AI ecosystem can continuously be bid up to the moon.
