The SpaceX disclosure arrives on the heels of a large equity round announced earlier this month by Google parent Alphabet and a data centre venture between Microsoft and Chevron, developments which underscore the hefty capital toll of the artificial intelligence drive.
Monday’s selling revived worries about the wisdom of the vast sums being pumped into artificial intelligence with little sign of any returns being made soon.
Traders are also fretting over the extended valuations of some firms, with Nvidia topping US$5 trillion.
“While the sector has performed exceptionally well, valuations have become stretched and the bar is now materially higher than it was a few months ago,” wrote Tony Sycamore at IG.
“Questions around capital expenditure and returns on artificial intelligence spending remain unanswered. While names like Intel and Micron are hitting fresh record highs, the Magnificent Seven (of top tech firms) has lost considerable momentum in recent weeks.
“Amazon and Nvidia are trading around 12 per cent below their recent peaks, while Microsoft and Meta Platforms sit not far above their March lows.”
Oil prices edged up, though they remain below US$80 following Monday’s drop that came after the US Treasury said it was temporarily lifting sanctions on Iran to allow it to produce, sell and deliver crude oil and related products through Aug 21.
Maritime trackers also pointed to an uptick in tanker traffic through the Strait of Hormuz.
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