As AI valuations enter their fifth year of expansion, investors continue to look for signs of a sell-off. Previously, stock markets worried about circular financing among the Magnificent 7. That included Microsoft (MSFT), Nvidia (NVDA), and Alphabet (GOOG).
AMD (AMD) and Micron (MU) are among the companies potentially involved in circular financing. Fears evaporated as those companies continued to commit billions to building out AI data centers. Fund inflow will continue after Anthropic files its initial public offering by November of this year.
AI Chatbot Subscription Risks
Mega corporations need to grow their chatbot subscription sales to justify their long-term investments in AI hardware. Subscriptions might slow if consumers cut back on spending. That lowers the total addressable market.
Rising diesel prices stemming from the ongoing Middle East war are a headwind. Diesel fuel prices topped $6.45 a gallon in the U.S. Transport trucks face higher diesel costs. As the season for transporting agricultural products begins, demand will increase. That adds pressure to the energy market.
Trucking stocks like Old Dominion Freight (ODFL) and J.B. Hunt (JBHT) fell sharply since peaking in June. Their operating profits might fall as energy inflation rises.
Inflation is a headwind for the consumer. When they spend less, corporations might lower their AI-related investments. That, in turn, puts pressure on the AI suppliers.
