AI stocks lost $US1 trillion in a week, but young investors keep piling in
More Australians than ever are investing, many in volatile AI stocks that lost $US1 trillion in one week but are now rebounding.
More Australians are investing than ever before, and many young investors are thinking seriously about betting on AI. Shares of 20 major semiconductor and AI companies lost more than $US1 trillion in value across one week of trading last week.
The shares have since rebounded. The problem is that most of these companies rely on debt to fund growth, and rising US interest rates are making that debt much more expensive.
CoreWeave, a cloud computing company, went from a $US90 billion value to about $US34 billion in 18 months as its debt climbed from $US30 billion to $US52 billion. Interest costs bit harder.
Investment banks including Deutsche Bank and RBC Capital Markets are warning that current AI spending is unsustainable. They recommend clients reduce their tech holdings.
The core risk: many AI companies are selling future potential, not proven profits.
- $US1 trillion
- Market loss in one week
- 20 major semiconductor and AI firms
- Companies affected
- $1.43 trillion AUD
- Australian currency equivalent
Why it mattersYoung investors saving for a house or retirement could be hit hard if they need to sell when the market is down, turning paper losses into real ones.
AustraliaAustralian investors face the same risks as global investors when they buy US-listed AI and semiconductor stocks; a market crash could wipe out years of savings.
✓ Claims checked against the source and corrected before publish. checked 4 h ago
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