Shares of the semiconductor company Marvell Technology (NASDAQ: MRVL) fell hard in July as investors sold off many artificial intelligence and semiconductor stocks amid growing skepticism that the massive wave of AI spending will be worth the costs.
Marvell’s stock fell 37% last month, according to data from S&P Global Market Intelligence, as investors seem to have reset their expectations for the company
AI spending skepticism is spreading It wasn’t all that long ago that tech companies could spend whatever they wanted on artificial intelligence, and shareholders were more than happy to see them make big bets on AI. But that’s changing. Consider that Alphabet recently said it’s raising its capital expenditures to $205 billion and that they will likely “increase significantly” next year.
Investors punished the stock on that news. And this sentiment is trickling down to semiconductor companies, too. Semiconductor stocks fell hard last month as investors worried that AI companies may eventually pull back on their spending if profits don’t follow soon.