Wall Street’s AI doomsday trade is here: chipmakers sink while hyperscalers gain

New York and San Francisco finally connected on Monday, as artificial intelligence’s existential-risk debate hit stocks. But the market’s reaction was more interesting than simply “sell AI.”

Nvidia fell more than 3% Monday morning, while Intel, AMD, and Marvell dropped between 5% and 6%, dragging the Philadelphia Semiconductor Index, a widely used measure of semiconductor stocks, down almost 6%. Neoclouds and other companies leveraged to relentless data center construction also came under pressure.

Yet two of the biggest spenders in the buildout went the other direction: Alphabet rose almost 2%, Microsoft added 1.6%, and Meta gained roughly 1.4%. Amazon fell about 1.6%, but held up considerably better than the chipmakers.

That divergence offers a bit of a window into how investors are gaming out something that, until this weekend, had quietly lurked in Wall Street’s risk models: What if the frontier AI race actually slows?

On Saturday, Anthropic........

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