Key facts
- Wall Street banks are benefiting from increased dealmaking and financing activity driven by AI infrastructure investments.
- Several high-profile AI-related stocks, including SK Hynix, SpaceX, Cerebras, and CoreWeave, have experienced significant declines after their initial market surges.
- Investors are growing concerned about the sustainability of chip demand and the high valuations of AI-related companies.
- Goldman Sachs CEO David Solomon described the current period as an 'AI capex super cycle' that will continue to drive investment.
- Bank of America has facilitated nearly $500 billion in fundraising for AI-related companies since 2025.
Wall Street banks are experiencing a surge in dealmaking and financing activity, driven by technology companies funding AI infrastructure. This has generated significant fees from capital raising and loans. However, the initial enthusiasm for AI stocks is waning, with several high-profile offerings experiencing substantial declines post-IPO. Investors are grappling with high valuations and questioning the sustainability of the AI capital expenditure boom.
Goldman Sachs CEO David Solomon described the current period as an 'AI capex super cycle' that will continue to drive elevated levels of strategic activity and capital formation. Rival banks like Citigroup and Bank of America have also reported substantial earnings from AI-related deals and financing. Bank of America, for instance, has helped raise nearly $500 billion for AI-related companies since 2025.
Despite the robust activity for banks, July has been challenging for technology stocks, particularly microchip makers. SK Hynix saw its US-listed ADRs drop 9% on Monday, closing below their debut price, following a record 15% plunge in its Korean-listed shares due to concerns about future chip demand. SpaceX, which had the largest IPO in history, has seen its shares trade near their offering price after peaking significantly higher. AI infrastructure companies like Cerebras and data-center operator CoreWeave have also experienced substantial drops from their initial highs, with Cerebras down nearly 50% and CoreWeave 55% below its all-time peak.