Daily Brief: Funding Fears Hit AI Stocks, SK Hynix Halts Solidigm IPO
AI and chip stocks fell as Meta's funding plan put the cost of the buildout in focus. Bloom Energy raised its outlook, and SK Hynix halted a Solidigm IPO review.
AI and chip stocks fell sharply on Thursday as Meta's new share class put the cost of funding the buildout in focus, and SK Hynix then dropped its review of a Solidigm listing. Bloom Energy raised its outlook again, while HUMAIN and Google announced new computing and grid capacity.
Meta's funding plan drags AI and chip stocks lower
Meta Platforms (NASDAQ: META) fell 6.98% on Thursday, which Reuters reported was its largest drop since July, a day after it unveiled a new share class that could help it raise funds. Lam Research (NASDAQ: LRCX) dropped 11.76% after its supply-constrained outlook, Advanced Micro Devices (NASDAQ: AMD) lost 8.10% and Nvidia (NASDAQ: NVDA) fell 4.40%, while the iShares Semiconductor ETF (NASDAQ: SOXX) fell 6.79%. Neoclouds CoreWeave (NASDAQ: CRWV) and Nebius (NASDAQ: NBIS) slid 10.06% and 7.23%. Reuters said the Nasdaq Composite lost 2.6%, its largest decline since June 5, that Meta's credit default swaps hit a record, and that Wall Street expects higher borrowing costs to push companies such as Meta to sell billions of dollars in stock to fund building. Nvidia, AMD, Lam and CoreWeave were up about 1% to 3% in early premarket trading Friday.
What It Means for Investors: If hyperscalers shift from debt toward equity to pay for data centers, dilution could weigh more on their valuations, and a higher cost of capital could hit leveraged neoclouds and their suppliers hardest.
Source: Reuters via Investing.com
SK Hynix halts its review of a Solidigm IPO, and its shares rebound
SK Hynix (KRX: 000660) said in a regulatory filing before Friday's open that it had stopped reviewing a pre-IPO funding round and an initial public offering for Solidigm, its U.S. subsidiary, citing capital market conditions, Seoul Economic Daily reported. The company said Solidigm's investment needs remain unchanged and it would keep exploring other financing, CNBC reported, noting that South Korea's financial regulator had flagged dual-listing concerns. SK Hynix closed up 4.42% at about 1.28 million won after opening lower, SK Square (KRX: 402340) rose 3.2%, and the KOSPI ended up 0.3% at 5,550.30 after opening 2.36% lower, Yonhap reported.
What It Means for Investors: Dropping the listing could ease concerns about a holding-company discount for SK Hynix and SK Square holders, but Solidigm's capital needs may now fall on SK Hynix's balance sheet or other financing, which could be in focus when it reports results next week.
Bloom Energy's revenue jumps 138% as it raises guidance a third time
Bloom Energy (NYSE: BE) reported third-quarter revenue of $1.24 billion, up 138.1% from a year earlier, and non-GAAP EPS of $0.94, and raised 2026 revenue guidance to $4.4 billion to $4.6 billion, its third increase this year. CEO KR Sridhar said, "What began with hyperscalers is rapidly moving across market segments." Bloom's cash flow statement shows operating cash flow of negative $27.1 million and capex of $153.5 million, up from $51.6 million in the second quarter, for a net cash decrease of $180.4 million. Shares fell 8.70% in the regular session to $217.77 before the release, ended after-hours trading down 6.9% and were down about 1% in early premarket trading Friday.
What It Means for Investors: The raised guidance suggests on-site power demand from data centers is still growing, but if heavier spending keeps cash flow negative, investors could weigh growth against funding needs.
HUMAIN expands its Nvidia plan by up to 84 MW, including 50 MW for a U.S. client
Saudi Arabia's HUMAIN, owned by the Public Investment Fund, expanded its Nvidia partnership to develop up to 84 megawatts of AI computing capacity, about 27,000 GPUs, The National reported from Nvidia's GTC conference in Berlin. The first 14 MW of Blackwell HGX B300 systems begins deploying in the fourth quarter, and a further 70 MW of Vera Rubin systems is planned from mid-2027, with 50 MW for an unnamed U.S. customer. The Vera Rubin projects remain subject to final agreements, the companies said.
What It Means for Investors: If the Vera Rubin phases are finalized, the deal could add to Nvidia's 2027 order pipeline outside the U.S. hyperscalers, and it shows Gulf campuses courting American customers, alongside Nebius's preliminary NEOM deal.
Google expands its Voltus virtual power plant tenfold to 1 GW in PJM
Google, a unit of Alphabet (NASDAQ: GOOGL), said it and Voltus agreed to build a 1-gigawatt virtual power plant across the PJM grid region, which serves 67 million people, up from a 100-megawatt agreement earlier this year. Voltus pools flexible capacity from businesses and homes, such as smart thermostats, batteries and industrial equipment, into a Google-funded program that temporarily cuts use during peak demand, with participants paid through bill savings and cash.
What It Means for Investors: If hyperscalers can pay to free up peak grid capacity rather than wait for new plants, it could ease some power constraints on data center growth in PJM, though it may also temper how much new generation utilities need to build there.
What to Watch Today
- 9:45 a.m. ET: S&P Global's flash U.S. PMIs for October.
- 10:00 a.m. ET: The final October University of Michigan consumer sentiment reading, after a preliminary 46.3 with year-ahead inflation expectations at 4.7%.
- Fed quiet period: Fed officials remain in their pre-meeting blackout ahead of the Oct. 27-28 FOMC meeting.
