CNBC Daily Open: Debt worries continue to weigh on AI-related stocks

U.S. stocks of late have been shaky as investors turn away from artificial intelligence shares, especially those related to AI infrastructure, such as Oracle, Broadcom and CoreWeave.

The worry is that those companies are running into high levels of debt to finance their multibillion-dollar deals.

Oracle, for instance, said Wednesday it would need to raise capital expenditure by an additional $15 billion for its current fiscal year and increase its lease commitments for data centers. The company is turning to debt to finance all that.

The stock lost 2.7% on Monday, while shares of CoreWeave, its fellow player in the AI data center trade dropped around 8%. Broadcom also retreated over concerns over margin compression, sliding about 5.6%.

That said, the broader market was not affected too adversely as investors continued rotating into sectors such as consumer discretionary and industrials. The S&P 500 slipped 0.16%, the Dow Jones Industrial Average ticked down just 0.09% and the Nasdaq Composite, comprising more tech firms, fell 0.59%.

The broader market performance suggests that the fears are mostly contained within the AI infrastructure space.

“It definitely requires the ROI [return on investment] to be there to keep funding this AI investment,” Matt Witheiler, head of late-stage growth at Wellington Management, told CNBC’s “Money Movers” on Monday. “From what we’ve seen so far that ROI is there.”

Witheiler said the bullish side of the story is that, “every single AI company on the planet is saying if you give me more compute I can make more revenue.”

The ready availability of clients, according to that argument, means those companies that provide the compute — Oracle and CoreWeave — just need to make sure their finances are in order.

— CNBC’s Ari Levy contributed to this report.

U.S. stocks edged down Monday. All major indexes slid as AI-related stocks continued to weigh down markets. Europe’s regional Stoxx 600 climbed 0.74%. The continent’s defense stocks fell as Ukraine offered to give up on joining NATO.

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U.S. collects $200 billion in tariffs. The country’s Customs and Border Protection agency said Monday that the tally comprises only new tariffs, including “reciprocal” and “fentanyl” levies, imposed by U.S. President Trump in his second term.

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