Nasdaq falls 2.4% as Nvidia, CoreWeave slide on AI financing concerns
Key Facts
The Nasdaq Composite fell 2.4% by 12:56 p.m. Eastern time during the October 22, 2026 session, according to the Associated Press, amid a selloff in artificial intelligence stocks. Nvidia shares dropped 4.3% during trading, with pressure spreading to companies tied to the sector's infrastructure expansion. CoreWeave fell more sharply, dropping 9.6% on concerns over its debt, the agency said. Those concerns come as the company's debt stands at about $50 billion, according to London Stock Exchange Group data cited by Reuters in a report published on October 15. Reuters reported that CoreWeave has never turned a profit, with pressure on its shares coinciding with concerns over financing its operations.
The latest selloff followed financing moves by CoreWeave, which announced plans to raise $3 billion through a convertible debt offering, according to a Reuters report published on September 17, 2026. The plan seeks to raise funding through debt instruments that can be converted into shares. On the revenue side, Microsoft's contribution rose to about 67% in 2025, compared with 62% in 2024, according to company disclosures cited by Reuters. Shares of neocloud providers had come under pressure during the October 14 session, when Nebius fell 15.1%. CoreWeave dropped 9.5% in that session, according to Reuters, before posting renewed losses in the latest trading.
The earlier correction extended to semiconductors, with the Philadelphia Semiconductor Index falling more than 11% during the week preceding the Reuters report published on October 19, 2026. Those losses were followed by a rebound on October 19, when several chip stocks rose. Nvidia gained 1.5% at the time, according to Reuters. AMD rose 3.6%, while Broadcom advanced 2.4%. Nvidia's decline during the October 22 session followed that gain, as selling returned to AI stocks.
In the chip fund sector, Direxion manages the leveraged SOXL exchange-traded fund, whose daily performance is linked to the NYSE Semiconductor Index. The fund targets 300% of the index's daily performance, according to the company's product description. That target is calculated before fees and expenses. The benchmark tracks the performance of the largest U.S.-listed semiconductor companies, according to the fund's fact sheet. Direxion warns against expecting the fund to deliver a multiple of the index's cumulative return when held for periods longer than a day, a limitation reflecting the distinction between its daily target and its performance over longer periods.
Nvidia outlined a model for supporting the financing of neocloud providers' facilities during its August earnings call, under which it commits to buying or paying for a portion of a facility's capacity, helping lenders finance the project. The company said independent capital assesses each deal on its merits, adding: "We do not provide loans." In its quarterly filing, Nvidia disclosed that it entered into guarantees in August 2026 benefiting SB Energy, with an aggregate cap of $105 billion, to provide credit support for the infrastructure project. Investing.com, citing the Financial Times, reported that Nvidia had also explored using insurance groups to distribute financing risks to hedge funds and alternative investors. The next Federal Open Market Committee meeting is scheduled for October 27 and 28, 2026, according to the Federal Reserve's official calendar.