Weekend Recap: AI Demand Holds Up as AI Financing Costs Climb
Chipmakers reported strong orders this week while chip stocks and AI-infrastructure debt sold off.
The week of October 12 split in two. TSMC (NYSE: TSM; TWSE: 2330) and ASML (NASDAQ: ASML; Euronext Amsterdam: ASML) both reported strong demand: TSMC said customer demand exceeds what it can supply, and ASML said some customers are already interested in orders for 2029 and 2030. At the same time, September consumer prices rose 3.7% from a year earlier, above economists' 3.6% forecast, while lenders demanded higher yields to fund the AI buildout and chip stocks fell for a full week.
Report: Chip stocks post longest losing streak since 2008
The Philadelphia Semiconductor Index (SOX) fell 3.83% on Friday, its eighth straight decline and its longest losing streak since October 2008. For the week, the iShares Semiconductor ETF (SOXX), a fund that tracks chip stocks, fell 11.8%. Nvidia (NASDAQ: NVDA) fell 6.6% and Micron (NASDAQ: MU) fell 14.6%.
What It Means for Investors: If hotter inflation keeps interest rates higher for longer, chip valuations could stay under pressure even as the companies themselves report strong demand.
TSMC beats its own guidance and studies Texas expansion
TSMC said third-quarter revenue rose 41.2% to $46.72 billion, above its own $44.6–45.8 billion guidance, and it guided fourth-quarter revenue to $52.3–54.3 billion. CEO C.C. Wei said he saw "no sign of slowdown" and said TSMC is evaluating capacity in Texas, the Taipei Times reported.
What It Means for Investors: A fourth-quarter guide implying 14% sequential growth at the midpoint could ease concerns about AI orders slowing, while a Texas expansion would put more of TSMC's capacity closer to its largest U.S. customers.
Source: TSMC · TSMC guidance · Taipei Times
ASML says customers are eyeing orders as far out as 2030
ASML reported third-quarter sales of €11.7 billion and net income of €5.0 billion, and raised the low end of its 2026 sales forecast to €44 billion (range €44–45 billion). CEO Christophe Fouquet said some customers are "expressing an interest" in placing orders for 2029 and 2030, CNBC reported.
What It Means for Investors: Interest in orders that far out suggests chipmakers are planning multiyear capacity expansions. That could support demand for chipmaking equipment if the plans turn into firm orders.
Neocloud debt reprices
Yields on CoreWeave (NASDAQ: CRWV) bonds due 2030 rose to near 16% after Gartner (NYSE: IT) forecast that 80% of neoclouds will stop operating independently by 2030. Volta Infrastructure's $5 billion loan priced at a yield above 11%. Cipher Digital (NASDAQ: CIFR) priced $850 million of zero-coupon convertible notes. CoreWeave shares fell 25.2% and Cipher shares fell 33.6% for the week.
What It Means for Investors: Neoclouds fund growth with debt, so if borrowing costs stay high, consolidation could accelerate along the lines of Gartner's forecast.
Source: Reuters via Investing.com
Report: Anthropic offers Blackstone 10% in $60 billion chip financing
Anthropic is offering Blackstone (NYSE: BX) funds a 10% coupon on $9 billion of junior debt in a $60 billion package to pay for tensor processing units (TPUs), the AI chips made by Alphabet's (NASDAQ: GOOGL) Google, the Financial Times reported, according to Investing.com. The package includes about $42 billion of senior debt guaranteed by Broadcom (NASDAQ: AVGO), and a similar deal four months ago priced at 8.5%, according to the report. The companies have not publicly confirmed the terms.
What It Means for Investors: If the terms hold, AI compute is getting more expensive to finance even for leading labs, and Broadcom would take on the risk on the senior debt it guarantees.
Source: Investing.com, citing the FT
Data centers that bring their own power
NiSource (NYSE: NI) signed a 20-year deal to add about 1,100 MW for Microsoft (NASDAQ: MSFT) in Indiana, with Microsoft funding the generation and transmission. EverWind announced a more than C$10 billion investment that includes a 420 MW campus in Nova Scotia; Reuters reported that Anthropic is the first tenant.
What It Means for Investors: If more data centers pay for their own power, regulators could face less pressure over customer bills, which could speed up hookups for large loads.
Source: NiSource · EverWind · Reuters via Investing.com
China proposes AI export controls
On Friday, China proposed adding 23 AI technologies to its export-restriction catalogue, including large models, AI agents and computing clusters. Exporters must register before exporting, starting immediately, and public comments are open until November 15.
What It Means for Investors: Companies doing cross-border AI deals involving China could face a new layer of approvals, depending on the final scope.
Source: China Ministry of Commerce
What to watch next week
- Wed, Oct 21: NextEra Energy (NYSE: NEE) reports third-quarter results before the market opens, with a webcast at 9 a.m. ET (NextEra).
- Wed, Oct 21: Lam Research (NASDAQ: LRCX) holds its earnings call at 2 p.m. PT (Lam IR).
- Wed, Oct 21: Texas Instruments (NASDAQ: TXN) holds its earnings call at 3:30 p.m. CT (TI).
- Wed, Oct 21: Tesla (NASDAQ: TSLA) reports after the close, with a webcast at 5:30 p.m. ET (Tesla IR).