Netweb, ESDS Software, Hitachi Energy India, other AI-related stocks fall up to 6% amid global AI selloff

Artificial intelligence-related stocks like E2E Networks, ESDS Software, Netweb Technologies were trading up to 6% lower on October 15 due to selloff in global chipmakers.

A global selloff in semiconductor stocks dragged South Korea’s equity benchmark down nearly 8% to push it into a bear market, as investors retreat from the frothiest corners of the AI trade.

Worries over Federal Reserve interest rate hikes and AI funding difficulties came to the fore on Thursday, driving SK Hynix Inc. and its memory peer Samsung Electronics Co. down more than 9% each. The Kospi has fallen about 21% from its September high. Korea’s stock exchange halted trading for 20 minutes earlier as selling deepened.

Japan’s Nikkei 225 dropped nearly 5%, with semiconductor-related shares including Ibiden Co. and Kioxia Holdings Corp. among the worst performers.

Investor angst grew after data showed US consumer prices advanced in September at the fastest clip in five months, spurring bets on more aggressive Fed tightening.

Equities are coming under pressure after a blistering rally as investors question whether billions poured into AI will deliver commensurate returns, prompting a shift toward safer assets.

On October 15, other AI-allied stocks like MTAR Tech, Anant Raj, Black Box were trading 3%-5% lower.

Power equipment stocks like Hitachi Energy India, GE Vernova T&D India, and CG Power and Industrial Solutions were down 4%-5%.

Investors priced in a 66% chance of a rate hike by the Federal Reserve in its December meeting, according to the CME FedWatch tool Wednesday. Core inflation for September rose 2.6% on year, up from 2.4% in August. On an on-moth basis, inflation, excluding food and energy prices, increased 0.3%, higher than Reuters’ poll of a 0.2% rise.

Meanwhile, fears about high energy consumption for artificial intelligence infrastructure continued to weigh on sentiment. Shares of CoreWeave and Oracle fell over 15% and 8%, respectively. Shares of SanDisk Corp. and Advanced Micro Devices fell more than 5% each, while Micron Technology and Nvidia Corp. fell 4% and 3%, respectively.