AI Selloff Deepens Amid Earnings Skepticism

Technology stocks came under pressure as a selloff in Asian shares gathered pace following sharp losses in SpaceX and Advanced Micro Devices ($AMD) that renewed skepticism over the sustainability of returns from the AI investment boom. U.S. stock index futures traded with little direction as investors assessed another round of corporate earnings and monitored diplomatic developments involving Iran. Nasdaq futures slipped while Dow and S&P 500 futures inched higher as earnings season continued to dominate investor attention. Wednesday's trading session gave back a slice of the multi-day rally as SpaceX's inaugural quarterly print spooked the AI-capex trade and $AMD got repriced on a Musk-driven chip switch.

AI momentum stocks tumbled as earnings results from key chip players disappointed investors and raised fresh questions about the AI spending cycle. $AMD faced selling pressure across multiple sessions, contributing to broader weakness in semiconductor names. Despite the broader selloff, Palantir Technologies ($PLTR) surged 29% over the past week, while NVIDIA ($NVDA) climbed 15%, outperforming the broader market and defying investor Michael Burry's warning of future AI investment "ghost towns." A jacked-up tech ETF that enhances daily exposure to leading chip stocks saw investor interest despite the volatility, though analysts cautioned that such vehicles demand a strong stomach in the current environment.

Hewlett Packard Enterprise ($HPE) partnered with Rigetti Computing and the Pittsburgh Supercomputing Center to build TangleLab, a hybrid quantum-classical supercomputing testbed funded by a $5.00 million National Science Foundation grant. Construction is slated to begin in September 2026, underscoring how $HPE is positioning itself at the intersection of quantum computing and AI infrastructure. The company's involvement in the project, alongside its recent focus on AI systems and networking, highlights its strategy to deepen its AI infrastructure capabilities through quantum partnerships. Broadcom ($AVGO) remained in focus as analysts highlighted AI growth opportunities and resilient execution.

Alphabet ($GOOGL) announced a major AI leadership reorganization, with DeepMind CEO Demis Hassabis stepping down from his role to become chief scientist of Alphabet and chair of DeepMind. CEO Sundar Pichai and analysts moved to downplay AI talent exit fears, though the departure of the company's most senior AI engineer weighed on shares before $GOOGL stock ticked higher in premarket trading. Separately, the company's $15 billion data center investment in India faced growing opposition from environmental activists concerned about water supply and wildlife impacts in the port city of Visakhapatnam. Google stated the project will comply with all applicable water laws and use air cooling technology to significantly reduce water usage, while Andhra Pradesh officials called activist concerns incorrect and misleading but remained open to feedback. The promised investment is expected to create 188,000 jobs.

Uber Technologies ($UBER) stock eyed its worst day in over eight months amid robotaxi spending concerns and a cautious third-quarter forecast. The company aims to deploy robotaxis in 28 cities in the long term and has committed to over $10 billion of capital over the coming years to scale autonomous vehicles. Lucid Group announced it is testing 100 robotaxis with $UBER and Nuro while executing a $1.4 billion cash overhaul as part of a broad operational reset. Uber shares fell sharply despite the company's expansion plans in autonomous technology partnerships.

SK hynix and SanDisk introduced a new High Bandwidth Flash technical specification through the Open Compute Project aimed at AI inference systems. Partners including $GOOGL and Tenstorrent are involved in defining the guidelines for this HBF standard, which arrives as AI workloads put more pressure on memory and storage infrastructure. SK hynix is a major memory and storage supplier with products that sit at the core of data centers and AI hardware. The new HBF specification represents an industry effort to create open standards for next-generation AI flash memory requirements.