AI Data-Center Stocks Fall After Elice's 32% Debut Plunge

Elice, which listed on South Korea’s secondary market, fell 32% on its first day, CNBC reported. The decline helped push South Korea’s Kospi into bear-market territory, while technology stocks dragged European indexes lower in morning trading. U.S. stock futures gave up overnight gains after Monday’s bounce in AI shares.

The selling spread to U.S. neocloud and data-center names. CoreWeave fell 4% before the opening bell, according to CNBC, after a negative close on Monday. Nebius and Iren each dropped about 5%, and Vertiv pulled back 2%.

HSBC analyst Abhishek Shukla wrote in a Monday note that debt-market strains and moderating revenue from large language models were worsening structural concerns for neoclouds. HSBC has a reduce rating on CoreWeave and a $39 price target, implying 36.5% downside from recent levels. The call contrasts with a Goldman Sachs upgrade that described CoreWeave as being “toward the top of the quality rankings in the ecosystem.” CoreWeave shares remained under pressure despite that upgrade.

The weak debut also follows a string of canceled data-center listings. Nvidia-backed Firmus, Blackstone-backed AirTrunk and SoftBank unit SB Energy have scrapped IPO plans, CNBC reported. Gartner chief forecaster John Lovelock, who wrote the report that fueled last week’s selloff, stood by his view that the AI race would consolidate. “Everyone in the AI race is running for a last-man-standing position,” he said. “Pretty much every market that Gartner is tracking in our AI race is likely to collapse down to a duopoly.”

Oil added to the market’s cautious tone. Brent crude rose above $111 a barrel early Tuesday, its highest since May, as attacks by Iran and its proxies picked up in the Middle East, CNBC reported. West Texas Intermediate crude for December delivery rose more than 2% to nearly $101. Trading blows between Ukraine and Russia over energy infrastructure also supported prices.

Two technology bellwethers were scheduled to report after the close. Netflix was expected to post 40% earnings growth for the third quarter, according to LSEG data cited by CNBC, but investors were focused on engagement trends after executive changes and job cuts. Netflix stock had fallen after each of its last five quarterly reports. SpaceX was set to report for only the second time as a listed company. Its shares traded above the $135 IPO price but below post-debut peaks, and CEO Elon Musk has pledged to give every American child a SpaceX share next year.

Nvidia, meanwhile, said it would invest nearly $10 billion in companies, universities and research institutions across Europe. CEO Jensen Huang announced a new collaboration with Germany after meeting Chancellor Friedrich Merz in Berlin, CNBC reported. Huang’s European tour has included investments in startups including Genesis AI, Agile Robots and Reflex Aerospace; Mistral AI remains a key partner. Nvidia is trying to speed AI adoption outside the U.S., though Europe’s regulatory environment could slow development.

Editor's Summary

Elice’s 32% drop in its South Korean trading debut pressured U.S. neocloud and data-center stocks, with CoreWeave, Nebius, Iren and Vertiv all falling before the open. The move renewed investor concerns about AI overcapacity and leveraged data-center business models, even as Nvidia expanded its European investment footprint. Oil prices above $111 and upcoming Netflix and SpaceX earnings added to the market’s cautious tone.