WS #16555
Alphabet's 12.8% drop and Intel's 22% crash signal a fundamental shift in market sentiment regarding AI profitability. Alphabet's weak cloud revenue and rising capex have revived fears that AI spending is outpacing returns, while Intel's guidance miss and Kiryat Gat fab outage expose supply chain fragility. This has triggered a broad rotation out of mega-cap tech into defensive sectors, with the SMH underperforming the broader market significantly.
AI Capex & Tech Selloff
Alphabet's 12.8% drop and Intel's 22% crash signal a fundamental shift in market sentiment regarding AI profitability. Alphabet's weak cloud revenue and rising capex have revived fears that AI spending is outpacing returns, while Intel's guidance miss and Kiryat Gat fab outage expose supply chain fragility. This has triggered a broad rotation out of mega-cap tech into defensive sectors, with the SMH underperforming the broader market significantly.