AI Capex Doubts Trigger Turmoil: Stocks and Commodities Dragged Down
Volatility in stocks with significant exposure to artificial intelligence (AI) is beginning to be seen as a more serious issue for global markets, beyond just a typical correction in the technology sector. The market is now focusing on two major questions: how much capital spending (capex) on AI computing infrastructure will continue, and whether the returns will truly be commensurate. When such doubts arise, the impact can quickly spread to the broader stock market, even extending to commodities.
In the stock market, the "AI theme" has been a key driver of the rally, driving the valuations of many technology issuers—from chips and servers to cloud computing to software—to trade at high premiums. However, large AI capex also means very high investment costs: data center construction, chip purchases, network expansion, and increased electricity demand. If investors begin to perceive these spending as too aggressive or the payback period too long, profit expectations could be revised downward, margins squeezed, and premium valuations difficult to maintain. This situation typically triggers sharper sell-offs, especially in stocks that were already "expensive" due to growth expectations.
These concerns can also create a domino effect across sectors. AI capex isn't just a story for technology companies; the chain of impacts involves many industries: energy providers and utilities (due to data center electricity needs), network infrastructure and logistics companies, and even commercial properties related to data centers. When sentiment worsens, the market often sells "as a package"—rather than picking stocks individually—so pressure can spread from the technology sector to other sectors. This is why AI volatility often looks like a wave sweeping through major indices.
Meanwhile, commodity markets are also vulnerable because AI has been driving the narrative of future demand. Computing infrastructure means significant consumption of materials and energy: industrial metals like copper (cables and networks), aluminum/steel (construction), and even energy commodities needed for electricity supply. If companies begin to reduce or delay AI capex, the market could lower commodity demand projections—driving prices to fluctuate even if physical supply remains unchanged in the short term.
Besides fundamental factors, there are technical factors that often exacerbate volatility: liquidity and deleveraging. When stocks fall sharply and volatility rises, market participants using leverage are potentially subject to margin calls, forcing them to sell other, more easily liquidated assets to cover losses. In such conditions, commodities—even assets often considered hedges—can be sold not because of a changing narrative, but because of a sudden need for cash. This results in cross-asset pressure: stocks weaken, commodities are dragged down, while funds flow into defensive assets like government bonds.
Going forward, market direction will be largely determined by whether companies can demonstrate that AI spending generates real revenue and profit growth, not simply capacity expansion. As long as investors await such proof, volatility is likely to persist: price movements will be sensitive to financial reports, capex guidance, and macro indicators such as inflation and interest rate policy. In other words, when AI capex is questioned, the market isn't just assessing one sector—it's reassessing a broader theme that has been underpinning global risk sentiment.
Source: Newsmaker.id
