Pressure on AI Investments Increases, Technology Stocks and Bitcoin Risks Rise

Concerns about the future of AI investments are increasing pressure in technology stocks and debt markets. JPMorgan noted that companies are struggling to find credit by solely operating in the AI sector, while Goldman Sachs emphasized that movements in technology stocks have become decisive in global risk appetite. These financing issues could also affect Bitcoin and other risky assets. Justin Biemann, Global Investment Strategist at J.P. Morgan Private Bank, stated that companies need to be able to finance their investments. Elon Musk pointed out that debt financing for AI cloud companies is tightening. The technology-heavy Nasdaq has fallen by 6.7% since October 6, dropping to 29,263. Losses for AI-related companies like Oracle and Nvidia have exceeded the decline in the index. In the debt market, the trading volume of credit default swaps (CDS) linked to bonds of Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom, and Nvidia exceeded $9 billion in September. Biemann noted that the five-year CDS premium for an AI infrastructure company has risen to 1,100 basis points. However, CDS premiums for major AI companies continue to remain in the range of 50-120 basis points. Goldman Sachs reported that 54% of the performance differences among asset classes over the past three weeks are related to semiconductor stocks. As the impact of high oil prices on inflation persists, the balance sheet data of major technology companies will be monitored.