OpenAI Perception Drives SoftBank $53 Billion Loss as Microsoft Grows

The artificial intelligence sector is currently experiencing a mix of booming growth and significant market anxieties. Legendary investor Mark Mobius warns of a potential 40% drop in top AI stocks, likening the current situation to an AI bubble and suggesting investors look towards emerging markets, particularly in China and India, which have already outperformed the S&P 500 this year. These concerns are echoed by SoftBank Group, whose shares plunged over 8% on Friday, resulting in a $53 billion market cap loss for the week, partly due to its perceived proxy status for OpenAI and uncertainties surrounding its partnerships and funding. Other major tech players like Arm Holdings, Advantest, and TSMC also saw declines. Despite these warnings, several companies are thriving by focusing on AI hardware and infrastructure. Dell Technologies, for instance, has seen its stock surge an impressive 28.0% this year, and nearly 400% over the last five years, driven by its strong push into AI hardware and expanded partnerships with cloud providers. Cisco Systems also shows new strength as a provider of AI infrastructure services, with its stock reaching new highs before facing some selling pressure. Constellation Energy, the largest nuclear power provider in the US, reported a revenue of $6.57 billion, exceeding expectations, with its stock growing nearly 60% this year due to high demand from AI data centers. Meanwhile, IREN reported record fiscal first-quarter earnings, with net income rising to $384.6 million and revenue increasing by 355% to $240.3 million. This growth stems from its strategic shift into AI cloud computing, moving away from bitcoin mining, highlighted by a significant $9.7 billion partnership with Microsoft expected to generate $1.9 billion in annualized AI Cloud revenue. IREN is also securing new contracts with companies like Together AI, Fluidstack, and Fireworks AI. On the other hand, Nvidia's stock dropped 3.65% to $188 after the US banned the sale of its new B30A AI chip to China, a move that significantly impacts its growth plans in the Chinese market, further complicated by China's new rules requiring state-funded data centers to use domestically produced chips. In the software and services space, Singapore-based WIZ.AI secured tens of millions of US dollars in a Series B funding round, led by SMBC Asia Rising Fund, to enhance its core AGI platform and expand into new emerging markets with its AI-powered voicebots. Conversely, Paycom Software missed its third-quarter earnings expectations, reporting revenue of US$493.3 million and adjusted earnings per share of US$1.94, even as it launched its new AI-driven product 'IWant' and announced a US$100 million investment in data centers to boost its AI capabilities.

Key Takeaways

• Legendary investor Mark Mobius warns of a potential 40% drop in top AI stocks, citing an AI bubble, and advises investing in emerging markets.
• SoftBank Group's shares plunged over 8%, leading to a $53 billion market cap loss, partly due to concerns over AI stock valuations and its association with OpenAI.
• Dell Technologies' stock surged 28.0% this year and nearly 400% over five years, driven by its focus on AI hardware and cloud provider partnerships.
• IREN reported record Q1 earnings with net income of $384.6 million and revenue of $240.3 million, fueled by a $9.7 billion partnership with Microsoft for AI cloud computing.
• Nvidia's stock fell 3.65% to $188 after the US banned sales of its B30A AI chip to China, impacting its market access and growth plans.
• Cisco Systems is showing strength as a key provider of AI infrastructure services to large web customers.
• Constellation Energy, a major nuclear power provider, saw strong stock growth (nearly 60% this year) due to high demand from AI data centers.
• WIZ.AI, a Singapore-based AI company, secured tens of millions of US dollars in Series B funding to expand its AGI platform and market reach.
• Paycom Software missed Q3 earnings but is investing US$100 million in data centers to enhance its AI capabilities and launched a new AI-driven product called 'IWant.'

Mark Mobius warns of AI stock crash, suggests emerging markets

Legendary investor Mark Mobius predicts a 40% drop in top AI stocks, calling it an AI bubble. He believes this correction will be short-lived but necessary. Mobius advises investors to buy into emerging markets, highlighting strong performance from Chinese and Indian stocks. He notes that emerging markets have already outperformed the S&P 500 this year.

Mark Mobius warns AI bubble could drop stocks 40%

Legendary investor Mark Mobius warns that the AI boom might be a bubble, potentially causing stocks to fall by 40%. He expressed concern about high valuations and large investments in the AI sector. Mobius suggests that investors should consider buying into emerging markets instead. He believes these markets offer better value and growth opportunities compared to the hyped AI sector.

Cisco CoreWeave Nebius report AI earnings

Cisco Systems stock shows new strength as a provider of AI infrastructure services to large web customers. The company's stock recently reached new highs but then faced some selling pressure. Cisco, along with CoreWeave and Applied Materials, are key players in the AI infrastructure sector. These companies are reporting their earnings, highlighting the growing importance of AI infrastructure.

SoftBank shares drop 8% as AI stock worries grow

SoftBank Group shares plunged over 8% on Friday, leading to a $53 billion market cap loss for the week. This drop follows growing concerns about the high valuations of AI-related stocks. Analysts suggest SoftBank's shares fell partly because investors see it as a proxy for OpenAI, whose partnerships and funding are uncertain. Other major tech companies like Arm Holdings, Advantest, and TSMC also saw declines.

Dell Technologies surges 28% with AI hardware focus

Dell Technologies has become a standout in the tech world, largely due to its strong push into AI hardware. The company has also expanded its partnerships with major cloud providers. This strategic focus has helped Dell's stock surge an impressive 28.0% this year. Over the last five years, Dell's stock has increased by nearly 400%. Investors are now watching to see if this strong momentum can continue.

IREN posts record profit with Microsoft AI cloud deal

IREN reported record fiscal first-quarter earnings, with net income rising to $384.6 million and revenue increasing by 355% to $240.3 million. This growth comes as the company expands into AI cloud computing, moving away from bitcoin mining. A significant $9.7 billion partnership with Microsoft is expected to generate $1.9 billion in annualized AI Cloud revenue. IREN is also securing new contracts with companies like Together AI, Fluidstack, and Fireworks AI.

Nvidia stock drops as US bans AI chip sales to China

Nvidia's stock price fell by 3.65% to $188 after the White House banned the company from selling its new B30A AI chip to China. This decision significantly impacts Nvidia's plans for growth in the Chinese market. The B30A chip is crucial for training large language models used by many Chinese firms. Additionally, China has introduced new rules requiring state-funded data centers to use only domestically produced chips, further limiting Nvidia's market access.

Constellation Energy slips on earnings despite AI demand

Constellation Energy, the largest nuclear power provider in the US, saw its stock slip after reporting its third-quarter earnings. The company's adjusted earnings per share of $3.04 missed analyst estimates of $3.11. However, Constellation's revenue of $6.57 billion exceeded the expected $6.20 billion. The company has experienced strong stock growth, up nearly 60% this year, due to high demand from AI data centers.

WIZ.AI raises millions in Series B funding

WIZ.AI, an AI company based in Singapore, secured tens of millions of US dollars in a Series B funding round. SMBC Asia Rising Fund led the investment, with participation from Beacon Venture Capital, SMIC SG Holdings, and existing investors Singtel Innov8 and Granite Asia. This funding will help WIZ.AI improve its core AGI platform and expand into new emerging markets. Founded in 2019, the company creates AI-powered voicebots that understand local languages and cultures for customer engagement in Southeast Asian markets.

Paycom misses earnings, invests 100 million in AI

Paycom Software reported its third-quarter earnings, with revenue of US$493.3 million and adjusted earnings per share of US$1.94, missing expectations. The company also launched its new AI-driven product called 'IWant.' Paycom announced a significant US$100 million investment in data centers to boost its AI capabilities and expand client services. This large AI investment, alongside the recent earnings miss, has raised questions about the company's strategy and its future profitability.

Sources

• Mark Mobius is ringing the alarm for a 40% stock crash - and flagging this sector as a buy
• Legendary investor Mark Mobius says the AI bubble could lead to a 40% drop in stocks, and flags one area of the market investors should buy
• Cisco, CoreWeave, Nebius Headline Parade Of AI Infrastructure Earnings Reports
• SoftBank shares slide over 8% amid renewed pressure on AI-linked stocks
• Is Dell Technologies a Standout After AI Hardware Push and 28% 2025 Surge?
• IREN Reports Record Q1 Revenue, Profit as Microsoft Deal Accelerates AI Cloud Growth
• Nvidia(NVDA) Stock: Drops Amid US Restrictions on AI Chip Sales to China
• Top AI energy trade Constellation Energy slips on earnings
• WIZ.AI Secures Series B Funding
• Why Paycom's (PAYC) AI Investment Strategy Raises New Questions After Third-Quarter Earnings Miss