Key facts
- Big AI stocks were mixed on Friday following a significant slump in the Nasdaq Composite Index.
- Meta Platforms' shares were fractionally lower, with its credit default swap spread narrowing.
- Other AI-related companies like SpaceX, Oracle, and Dell saw modest gains, while Nvidia, Alphabet, and Amazon dipped slightly.
- Concerns about the cost of AI buildout and investment returns have contributed to market volatility.
- Anthropic's IPO prospectus is expected soon, and major tech companies are set to report earnings next week.
Big AI stocks traded mixed on Friday, a day after the Nasdaq Composite Index experienced its largest decline in four months. Investors are looking ahead to more information on Anthropic's forthcoming IPO and a wave of earnings reports next week.
Meta Platforms, which was at the center of Thursday's sell-off, was fractionally lower. The company had announced plans to create a new class of shares to fund further capital spending, which was interpreted as a sign of costly AI buildout for shareholders.
Other major AI players showed mixed performance, with SpaceX, Oracle, and Dell Technologies rising 1% to 2%, while Nvidia, Alphabet, and Amazon saw slight declines of less than 1%. Major semiconductor stocks were mostly higher after a significant drop on Thursday.
Credit default swaps for big AI players were mostly lower, with Meta's five-year CDS spread narrowing. The cost of these swaps has risen over the past year due to concerns about the risks taken on by large AI spenders, particularly after Meta's decision to sell more stock, as much of the AI buildout has been debt-financed.
Analysts noted that the market has been treading water, with sell-offs met by buyers and upward movements by sellers. Concerns around AI spending and investment returns, coupled with rising Treasury yields, have added to market volatility.