Wall Street is bracing for a downbeat session. Futures for the tech-heavy Nasdaq Composite and the broad S&P 500 both pointed lower, putting both indices on track to end the trading week in negative territory. The selloff was led by semiconductor and AI-linked stocks, the very names that have powered this year's rally.
Investor anxiety was fueled by a Bloomberg report that OpenAI's highly anticipated initial public offering may face delays, rekindling doubts about whether sky-high valuations in the AI sector are justified. The news came just hours after Cerebras, an AI chipmaker, surged 68% on its public market debut—a stark reminder of the market's bifurcated appetite for AI exposure.
Losses in US futures tracked a sharp decline across Asian equity markets, where technology shares also tumbled. Analysts pointed to a growing disconnect between AI companies' valuations and their near-term earnings potential, with some warning that the sector may be entering a correction. The Nasdaq is now on pace for its worst weekly performance in over a month.
Counter-argument: Some strategists contend that near-term jitters do not undermine the long-term transformation AI promises across industries. They argue that pullbacks in high-growth sectors are natural after extended runs, and that today's weakness could present buying opportunities for investors with longer time horizons.