Nvidia’s stock tumbled roughly 5% on Monday, November 9, shattering any illusion that last week’s brutal AI sell-off had run its course. The decline landed despite a broader market rebound that saw US futures firm up and Japan’s Nikkei climb 2.3%.
For European investors, the signal carries weight. Much of Wall Street’s outperformance over European markets has ridden on the AI boom. Should doubts solidify, the same stocks that powered American gains now face the steepest downside.
The sharpest pain struck companies most entangled with AI infrastructure spending. SoftBank dropped 4.2% in Tokyo, extending its collapse to 63% below its early June peak. Kioxia, Japan’s memory chip and data centre supplier, shed 2.5% and now sits 78% under its June high after warning that memory demand had started to plateau.
Meanwhile, CoreWeave, which leases AI computing capacity, lost 4% overnight, erasing Friday’s gains entirely. The company reports earnings after Tuesday’s close, the same day SoftBank releases results. CoreWeave trades 78% below its peak from 19 months ago. The iShares Semiconductor ETF slipped 1.7% in early trading after Friday’s 3.5% bounce.
None of these concerns emerged overnight. Investors have spent months questioning AI spending levels, the circular flow of money among a handful of firms, and whether returns will ever justify the costs. Google’s spending disclosure last month intensified those doubts. Anthropic now faces awkward timing as it begins its investor roadshow this week ahead of a planned listing.
Yet corporate profits paint a different picture. FactSet data shows 84% of S&P 500 companies reporting so far have beaten profit forecasts, with 74% surpassing revenue expectations. Earnings have jumped 31.4% year over year, ahead of September’s 29% projection. That strength keeps buyers coming back to dips. But it also sets a higher bar for next quarter and into 2027.
Oil prices fell again Monday after their worst weekly rout since March 2020. Brent lost 16% last week while WTI dropped 13.2%. President Trump said he considered heavy strikes on Iran “highly unlikely” if talks progressed, though Secretary of State Marco Rubio noted Iran was raising unreasonable demands. Attacks on ships in the Strait of Hormuz over the weekend kept risks elevated.
Gold extended its recovery from below $3,900 last Monday but remains far under January’s record near $5,600. Analysts want to see it hold above $4,200 before calling a bottom. The dollar weakened as safe-haven demand faded. China’s wholesale prices rose at their fastest pace since June 2022, driven by raw materials and mining costs.
The market wants last week’s sell-off to be another buying opportunity, as has happened repeatedly over four years. This time could differ. Investors appear to be separating companies earning real money from AI versus those still spending on its promise. Europe holds fewer of either, which hurt on the way up but could offer unexpected protection on the way down.
