AI Stocks Crater as Citi Research Flags New Data Center Risk

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1. 1h ago

   AI Stocks Crater as Citi Research Flags Data Center Risks

   Artificial intelligence stocks plunged following a market rout driven by newly flagged data center risks and lingering pressures from high interest rates, heavy capital spending, and questions over returns. Investors offloaded shares in major chipmakers and hardware developers as Wall Street began pricing in local pushback against infrastructure projects. Companies experiencing steep declines included Advanced Micro Devices, Micron, Intel, Nvidia, Lattice Semiconductor, Applied Materials, and KLA Corporation. The downturn ended a post-election honeymoon period for the broader AI trade, as sentiment soured sharply amid mounting regulatory and community hurdles.

   Why it matters

   The sharp market correction underscores growing vulnerability in the artificial intelligence sector as physical infrastructure constraints catch up with high valuations. For more than a year, local pushback against power-hungry facilities has been building across various communities. Wall Street is now actively pricing in these physical and political bottlenecks, shifting focus from pure software and chip demand to the practical limits of real-world deployment.

   What is confirmed

   • Investors dumped AI stocks as they weighed the risks of a slowdown in data center development.
   • Citi Research data shows U.S. data center bans and pauses sat near zero through mid-2025 before climbing to roughly 20 by December.
   • Shares of companies including Advanced Micro Devices, Micron, Intel, Nvidia, Lattice Semiconductor, Applied Materials, and KLA Corporation fell during the market selloff.

   What to watch next

   • Further regulatory actions or municipal bans targeting data center developments
   • Subsequent analyst revisions regarding chipmaker valuation multiples and capital spending returns
   Sources used for this update (8)

   1. www.businessinsider.com — Stocks are cratering as the AI trade's post-election honeymoon ends
   2. Benzinga — AI Stocks Crater as Citi Research Flags New Data Center Risk - Advanced Micro Devices (NASDAQ:AMD), Micro
   3. Yahoo Finance — Micron and Sandisk valuation multiples are unbelievable as chip stocks get crushed
   4. The Globe and Mail — Lattice Semiconductor, Applied Materials, AMD, Intel, and KLA Corporation shares are falling, what you need to know
   5. Barron's — Memory Stocks Are Tanking. Should You Buy the Dip?
   6. Forbes — Nvidia, Micron, Intel Plunge In Worsening Chipmaker Selloff
   7. www.cnbc.com — AI stocks hammered by midterm shock - CNBC
   8. www.tradingview.com — From Micron to AMD, AI Stocks Crater — And Citi Just Flagged ...
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