WS #15890
The AI infrastructure trade is facing a credit reality check as CoreWeave and Nebius plummet, with CoreWeave down nearly 15%. Goldman Sachs has warned of a semiconductor "air pocket," noting that the bond market is refusing to finance the next wave of data center construction. This contrasts with ASML's report of strong pricing power, indicating that while demand for chips is robust, the financing model for the underlying infrastructure is breaking down under high interest rates. Despite the broader tech selloff, ASML reports that AI demand is boosting its pricing power, with chipmakers agreeing to pay more for equipment. This suggests that the underlying demand for AI infrastructure remains strong, even if the financing for it is constrained. Institutional investors like N10 Wealth LLC are seen buying shares of TSM and AMD, indicating that some smart money is positioning for a recovery in the semiconductor sector once credit conditions stabilize.
AI Infrastructure Credit Crunch
The AI infrastructure trade is facing a credit reality check as CoreWeave and Nebius plummet, with CoreWeave down nearly 15%. Goldman Sachs has warned of a semiconductor "air pocket," noting that the bond market is refusing to finance the next wave of data center construction. This contrasts with ASML's report of strong pricing power, indicating that while demand for chips is robust, the financing model for the underlying infrastructure is breaking down under high interest rates.
Despite the broader tech selloff, ASML reports that AI demand is boosting its pricing power, with chipmakers agreeing to pay more for equipment. This suggests that the underlying demand for AI infrastructure remains strong, even if the financing for it is constrained. Institutional investors like N10 Wealth LLC are seen buying shares of TSM and AMD, indicating that some smart money is positioning for a recovery in the semiconductor sector once credit conditions stabilize.