Weekend Recap: AI Stocks Slide as Funding Questions Grow
Thursday's selloff in AI and chip stocks came a day after Meta approved a share class it can use to raise money, even as suppliers reported rising AI orders.
The cost of the AI buildout came into focus last week. On Thursday the Nasdaq Composite had its largest decline since June 5, and Meta Platforms (NASDAQ: META) fell 9.4% for the week. The iShares Semiconductor ETF (NASDAQ: SOXX) fell 3.1%, while server and power suppliers reported AI-driven growth.
Meta narrows its capex range and adds a fundraising share class
Meta narrowed its 2026 capex outlook to $135 billion to $145 billion from $130 billion to $145 billion, after negative third-quarter free cash flow of $2.12 billion. Its board approved a non-voting Class C stock, effective Jan. 19, 2027, that Meta said can be used to raise capital and fund acquisitions. Meta fell 6.98% Thursday, its largest drop since July, in a broad AI selloff that Reuters linked to worries over AI returns and funding.
What It Means for Investors: If hyperscalers sell stock to fund data centers, as Reuters said Wall Street expects, dilution could weigh on their shares even as their spending keeps supporting chip orders.
Source: Meta · Reuters via Investing.com
Lam posts record revenue but flags supply limits
Lam Research (NASDAQ: LRCX) reported record revenue of $8.22 billion and guided December-quarter revenue to $8.6 billion, plus or minus $400 million. CFO Doug Bettinger said on the earnings call that the guide "would have been a bit higher if not for some near-term supply chain constraints." CEO Tim Archer expects 2027 chip-equipment spending above $200 billion but said component constraints would persist. Lam fell 12.8% for the week, KLA (NASDAQ: KLAC) 12.1% and Applied Materials (NASDAQ: AMAT) 7.8%.
What It Means for Investors: If supply constraints persist into 2027, toolmakers' revenue could slip from one quarter to the next even with demand strong.
Source: Lam Research · Stock Analysis transcript
Report: Anthropic's draft IPO filing shows about $450 billion in cloud commitments
Anthropic's first-half revenue rose to $16.3 billion from $1.1 billion a year earlier, according to a draft prospectus viewed by The Wall Street Journal. The Journal's account lists a net loss of $80.7 billion, mostly non-cash, and about $450 billion in cloud commitments, including $111 billion with Google Cloud, part of Alphabet (NASDAQ: GOOGL), $110 billion with Amazon's (NASDAQ: AMZN) AWS and $31 billion with Microsoft (NASDAQ: MSFT). Separately, CNBC reported that OpenAI is close to raising up to $30 billion at a $1.25 trillion valuation.
What It Means for Investors: If the commitments hold in the public filing, Alphabet, Amazon and Microsoft could face questions on next week's calls about how much of their cloud backlog rests on one customer.
Source: The Wall Street Journal via Investing.com · CNBC
SpaceX's AI unit leads its quarter as Tesla trims its capex plan
SpaceX (NASDAQ: SPCX) said revenue rose 161% to $14.6 billion, and its Super Intelligence segment posted $4.95 billion of segment adjusted EBITDA on $7.56 billion of revenue. Elon Musk said SpaceX and Tesla (NASDAQ: TSLA) had formed special committees to review a possible merger, with no terms agreed. Tesla cut its 2026 capex guidance to about $20 billion, from a previous forecast of more than $25 billion, according to Reuters.
What It Means for Investors: If Tesla's capex expands again in coming years, as CFO Vaibhav Taneja said on the call it would, this year's cut could delay rather than shrink its demand for AI compute.
Source: SpaceX · TechCrunch · Tesla call transcript · Reuters via Investing.com
Super Micro lifts its quarterly revenue estimate by about $4 billion
Super Micro Computer (NASDAQ: SMCI) estimated fiscal first-quarter revenue at $18.5 billion to $19.5 billion, versus guidance of $14.5 billion to $15.5 billion, "primarily due to increased demand for AI platforms."
What It Means for Investors: If final results on Nov. 3 confirm the range, expectations could rise for Nvidia (NASDAQ: NVDA) and other AI server suppliers, though the figures are unaudited and could change.
ABB's data center orders more than double as Bloom raises its outlook again
ABB (SIX: ABBN) said orders rose 40% to a record $12.06 billion, citing a "triple-digit increase" in data center orders, for a book-to-bill of 1.24. Bloom Energy (NYSE: BE) said revenue rose 138.1% to $1.24 billion and raised its 2026 revenue guidance for the third time this year, to $4.4 billion to $4.6 billion. Its operating cash flow was negative $27.1 million, and capex nearly tripled from the second quarter to $153.5 million.
What It Means for Investors: If ABB keeps booking orders faster than it ships while holding capex near $1 billion, its data center backlog could keep growing. If Bloom's spending keeps cash flow negative, investors could weigh its growth against funding needs.
What to watch next week
- Tue, Oct. 27: September durable goods orders, 8:30 a.m. ET.
- Tue-Wed, Oct. 27-28: The Fed's FOMC meeting.
- Tue, Oct. 27, 8 p.m. ET: SK Hynix (KRX: 000660) posts results before its earnings call (9 a.m. Oct. 28 in Seoul), its first since it halted a Solidigm IPO review.
- Wed, Oct. 28: Alphabet's earnings call, 4:30 p.m. ET, plus KLA and Microsoft results after the close.
- Thu, Oct. 29: Third-quarter GDP and September personal income and outlays, 8:30 a.m. ET.
- Thu, Oct. 29: Intel (NASDAQ: INTC) and Digital Realty (NYSE: DLR) report after the close; their calls and Amazon's are at 5 p.m. ET.
- Fri, Oct. 30: The third-quarter Employment Cost Index, 8:30 a.m. ET.
