British News Agency

The source of the concerns is the high level of borrowing these companies are taking on to finance multi-billion-dollar deals.

For example, Oracle said on Wednesday that it needs to increase capital expenditures by an additional $15 billion in the current fiscal year and raise lease commitments for data centers, financing all of this through debt.

Oracle shares fell 2.7% on Monday, while shares of its AI data-center rival CoreWeave dropped about 8%. Broadcom also retreated by around 5.6% due to margin-compression concerns.

However, the broader market was not hit too hard as investors continued to rotate into sectors such as consumer goods and industrials. The S&P 500 fell 0.16%, the Dow Jones Industrial Average slipped 0.09%, and the Nasdaq Composite declined 0.59%.

According to analysts, overall market performance shows that concerns are largely concentrated in AI infrastructure. In this area, returns on investment are required to keep funding AI investments, and so far, those returns appear to be present.

Witheiler noted that the positive side of the situation is that “every AI company in the world says it can generate more revenue if it is given more computing power.”

Under this argument, customer readiness means that companies providing computing power (Oracle and CoreWeave) only need to ensure their financing remains in order.