AI headlines giveth, and AI headlines taketh away.
Wall Street learned that lesson on Tuesday after a report from The Information sent Oracle shares and other AI darlings sliding on an otherwise slow news day.
The Nasdaq Composite was down 1%. The S&P 500 was down 0.6%. The Dow was down 160 points, or 0.3%. The iShares Semiconductor ETF fell 2.2%. Oracle stock was down 6%.
AI stocks have rallied for weeks on a wave of headlines related to generative AI leaders and chip makers making deals, most recently a partnership between OpenAI and Advance Micro Devices. On Tuesday, the opposite occurred, as a report on Oracle’s internal financials in its cloud business spooked traders.
The Information reported on internal documents at Oracle that shined a light on the fact that monetizing the AI buildout is still in its early stages. The outlet noted the firm lost $100 million in the three months ended in August from rentals of Nvidia Blackwell chips, though it did point to an impact from the period between when data centers are set up and ready for customers and when customers start paying for such services.
In a market where a daily AI headline can send a stock up more than 20%, investors will also need to be ready for moves the other way.