AI infrastructure firms slump as US rate hike bets rise

Oct 14 (Reuters) — Shares of debt-heavy AI firms tumbled on Wednesday as prospects of higher interest rates intensified concerns over the financing of the industry's massive buildout. Companies whose shares had rallied earlier this year on AI optimism were some of the worst performers on the main benchmarks. Here are the details: Shares of neocloud firms Nebius and CoreWeave dropped 15.1% and 9.5%, respectively CoreWeave stock set to wipe out about a quarter of its value this month, Nebius set to erase almost 20% Data center operators Applied Digital and IREN down 8.8% and 9.9%, respectively Shares of debt-laden AI hyperscaler Oracle were down 7.2% and most of its dollar bonds had also declined "Investors are questioning whether the AI buildout will generate the returns that were expected," said Kim Forrest, chief investment officer at Bokeh Capital Partners AI server makers Dell and HPE dropped 10.3% and 6.4%, respectively, as Barclays downgraded the ratings on the stocks to "equal-weight" from "overweight" "Valuations have run, commodity costs have helped revenues, and we don't see a meaningful AI inflection yet," Barclays said Higher rates mean elevated costs for firms borrowing