AI computing stock panic over Meta cloud rumour ‘erroneous’, analysts say
Fears of AI hardware glut not warranted, as ‘Meta’s data centre and compute procurement will accelerate, not slow down’, SemiAnalysis says
A panic over excess computing capacity for artificial intelligence was “erroneous”, according to a report by research firm SemiAnalysis, after a global sell-off erased billions of dollars in value from semiconductor stocks on Thursday.
Spooked investors interpreted a potential pivot by Meta Platforms into cloud services as a sign of an AI hardware glut, as they feared the US tech giant was preparing to flood the market with unused graphics processing units.
Shares of alternative cloud companies plummeted on Thursday, with CoreWeave and Nebius plunging 14 per cent and 17 per cent, respectively. US chip heavyweights including Micron Technology, AMD, Intel and SanDisk also suffered losses ranging from 4 to 14 per cent.
However, panicked investors had misread the situation, analysts at SemiAnalysis argued in its note released in the aftermath of the plunge.
“Meta’s data centre and compute procurement will accelerate, not slow down,” they said, adding that the company’s capital expenditure in 2027 would be “shockingly high”.
Market reaction to the news – both the aggressive sell-off of cloud-services providers and renewed debates about “overcapacity” – was not warranted, they added.