Meta’s plan to sell surplus computing power has hit chip stocks hard on Wall Street. Meta’s private shares rose nearly 9% on the news.
The announcement flipped years of supposed scarcity in AI accounts into a warning about supply. It wiped out billions in value from new semiconductors and cloud in one sitting.
The supply signal shakes Wall Street
Meta is building A company called Meta Compute. The unit will lease idle data center capacity to external customers. This approach mirrors the SpaceX model. At SpaceX rented Spare capacity of companies including Anthropy.
For years, investors have been rewarding chip suppliers on one premise. They believed that the demand for AI always exceeds the supply. Meta’s recognition of excess capacity breaks this hypothesis. recently Nvidia institutional money flow Data already shows major investors pulling out.
Micron sinking More than 10% on July 1st. SanDisk, Intel, and AMD each lost between 6.9% and 10.6%. Nvidia stock fell just 1.25%, a modest decline that stood out in the face of the broader rout.
New fasteners and big technology are moving apart
CoreWeave and i won’t It leased GPU capacity to AI developers and saw their shares fall 14% and 17% respectively on fears Meta would undercut their prices.
Meta has paid for similar cloud services before, but its shift to the same business now puts it in direct competition with its own vendors.
The other Magnificent 7 members have made progress. Apple, Microsoft, Amazon, Alphabet and Tesla all closed higher as some strategists link the split to AI Spending Tournament Winners Rotate away from pure hardware plays.
South Korea feels the stretch
The selling extended to Asia, where shares of Samsung and SK Hynix Memory fell more than 7% and 9%, respectively, in early trading and the Kospi sparked another wave of selling. Trading stopped. The move extends a pattern of previous Big Tech sell-offs that hit Asian chipmakers earlier this year.
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