> Cracks in AI Trade Push Wall Street to Worst Week Since June

Upstart CoreWeave took the brunt of the blow, with CoreWeave shares sliding 12% on Friday and 25% for the week. But the selloff swept through the wider tech sector, bringing down everyone from giant hyperscalers Amazon.com and Alphabet to highflying chip stocks Micron and Advanced Micro Devices.

The PHLX semiconductor index, packed with AI heavyweights like Nvidia and Broadcom, slid 3.8% on Friday to mark its longest losing streak since 2008. Dell Technologies plunged 22% this week, its worst weekly performance on record.

The swoon in stocks highlighted the close linkages between the economy, markets and a relatively small group of technology highfliers. There are roughly 45 S&P 500 companies deemed as having material exposure to artificial intelligence. Together, those companies have made up around 39% of the index’s 14.1% return through Oct. 11, according to S&P Dow Jones Indices.

“AI is not only the economy, but it has become the equity market and a dominant force in the bond market too,” Barclays strategists wrote in a recent note to clients. 

Warning signs started to flash in the trading of bonds tied to data-center companies this week, many of which fell sharply. The losses started with the riskiest and most indebted companies, like CoreWeave, but by Friday were showing up in data-center bonds with investment-grade ratings. Analysts said a Thursday announcement that Apple and Meta would team up on new AI models that run locally on a laptop, rather than at data centers, added to concerns.

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