Top Stories This Morning: Investors Sold Off AI Stocks; SK Hynix Canceled Solidigm's IPO

The Nasdaq Composite Index suffered its biggest drop since June as investors fled tech stocks amid rising costs for artificial intelligence. OpenAI is close to raising up to $30 billion at a valuation of $1.25 trillion ahead of a potential IPO in 2027. South Korea’s SK Hynix has scrapped a $10 billion IPO for its subsidiary Solidigm—which could have valued the memory manufacturer at $100 billion—due to pressure from regulators and shareholders. Read about these and other topics in our roundup of key events as of the morning of October 23.

On October 22, tech stocks suffered their sharpest sell-off since June—the Nasdaq Composite Index closed down 2.6% for the day. The Philadelphia Semiconductor Index fell 6.7%.

Meta Platforms shares fell 7%—the biggest drop since July. The day before, the company raised its capital expenditure forecast for 2026 and reported that, due to AI-related expenses, its free cash flow turned negative in the third quarter: minus $2.12 billion, compared to plus $10.63 billion a year earlier. Meta recorded a net cash outflow for the first time in more than a decade.

"Rising expenses, combined with negative cash flow and insufficient returns on these investments, lead investors to believe that this is a kind of bottomless pit," Robert Pavlik, senior portfolio manager at Dakota Wealth, told Reuters.

The sell-off also affected other AI-related companies: SpaceX shares fell 9%, and Nvidia shares fell 4%. Shares of Nebius, a provider of cloud-based AI infrastructure, fell 7% following the announcement that it had secured a $3.5 billion credit line from Citigroup. Shares of its competitor, CoreWeave, fell 10%.

Investors are increasingly concerned about the rising costs of long-term projects, the returns on which remain uncertain, Reuters notes. Over the past year, technology companies have raised massive amounts of debt to finance AI-related expenses. However, Wall Street now expects that rising borrowing costs will push companies such as Meta to sell billions of dollars’ worth of shares to finance the next phase of infrastructure development and capacity expansion.

Elon Musk’s SpaceX intends to secure access to at least 80,000 sites for deploying cellular equipment in the U.S., Bloomberg reported, citing sources. The company is in talks with telecommunications infrastructure owners, including Crown Castle, one of the largest tower operators. The potential deals could be worth billions of dollars. This would allow SpaceX to become the fourth nationwide mobile carrier in the U.S.

Following the announcement, Crown Castle’s stock jumped 10%, while shares of telecom operators AT&T, Verizon, and T-Mobile fell by about 5% amid concerns about increased competition. Previously, SpaceX acquired radio frequencies for mobile communications and received approval to launch 15,000 satellites capable of providing direct connectivity between smartphones and the Starlink network.

Anthropic’s upcoming IPO, which is expected to be valued at up to $2 trillion, could generate tens of billions of dollars for venture capital funds and technology companies, according to Bloomberg. Iconiq, which has invested more than $6 billion in the developer of Claude, holds a stake worth about $17 billion based on Anthropic’s current valuation of $965 billion. If the IPO proceeds at a $2 trillion valuation, the value of that stake could double. Menlo Ventures’ stake is valued at $14 billion on an investment of over $1 billion, while Spark Capital’s $7 billion stake was acquired for just $75 million in 2023.

Other major investors in Anthropic include Sequoia Capital, which invested $3 billion for a stake of about 1%, and Singapore’s sovereign wealth fund, GIC, which invested more than $4.5 billion. Former Google CEO Eric Schmidt owns about 1% of the company. In the coming days, Anthropic is expected to publicly file documents for an IPO that could be one of the largest in the history of the tech sector, the agency reports.

OpenAI is close to finalizing a new funding round of up to $30 billion, with the company valued at $1.25 trillion on a pre-money basis, CNBC reports, citing sources. The round is being led by investors from the UAE in partnership with Coatue. The company expects to sign agreements by the end of next week. At the same time, OpenAI is in talks to expand its computing capacity in the UAE. By 2030, it plans to spend about $600 billion on computing resources.

The funding is seen as an intermediate step leading up to an IPO, which could take place in 2027, the TV channel notes.

South Korea's SK Hynix has scrapped plans for a $10 billion IPO of its subsidiary Solidigm in the U.S. following opposition from regulators and shareholders, Bloomberg reports. The offering, originally scheduled for 2027, could have valued the manufacturer of flash memory for AI data centers at $100 billion. South Korean regulators feared that a dual listing would dilute the parent company’s share value and harm the interests of minority shareholders. Following the announcement of the IPO’s cancellation, SK Hynix’s shares rose despite a broader market decline.

Solidigm has joined data center developers Firmus and AirTrunk, which have also pulled out of their IPOs amid concerns about a bubble forming in the AI market. Since its peak in June, SK Hynix’s stock has fallen by about 60%, and its market capitalization has shrunk to $679 billion. The company emphasized that the decision to cancel the IPO does not change Solidigm’s growth prospects or its need for investment.

Moderna's stock plummeted 17.6% at the close of trading on Thursday and fell by a record 26% during the session following the leak of results from the final phase of trials for a personalized melanoma vaccine developed in collaboration with Merck, according to Yahoo Finance. Moderna’s market capitalization fell by more than $17 billion. According to preliminary data, the vaccine, when combined with Keytruda, reduced the risk of cancer recurrence or death by 42%, compared with 49% in a previous study; however, the results cannot be directly compared due to differences in the patient groups.

The sell-off was exacerbated by the rapid rise in Moderna’s stock price in recent months: from mid-August through Wednesday, the stock had nearly quadrupled in value. On August 19, the stock soared 177% following news of successful trials. The company plans to present the full results of the new study on Saturday at an oncology conference in Madrid.

SpaceX generated $561 million in investment income from its stake in Elon Musk’s The Boring Company in the third quarter of 2026, according to CNBC. This amount accounted for more than half of the company’s other income and helped boost net income to more than $4 billion. In September, The Boring Company, which builds underground transportation tunnels, raised $3 billion at a valuation of $23 billion, the network noted.

In addition, SpaceX purchased $151 million worth of Megapack energy storage systems from Tesla. Musk had previously stated that he believes a merger between SpaceX and Tesla would be advisable. According to him, both companies have formed special committees to discuss a potential deal.

— Japan's broad-based Topix index fell 1.2%, while the Nikkei 225 fell 0.7%.

— Hong Kong's Hang Seng Index rose 0.7%, while mainland China's CSI 300 Index rose 0.4%.

— In South Korea, the KOSPI index fell 0.8%, and the KOSDAQ index fell 1.8%.

— Australia's S&P/ASX 200 remained virtually unchanged.

— Nasdaq 100 futures were virtually unchanged, while S&P 500 futures fell 0.1% and Dow Jones Industrial Average futures fell 0.3%.

This article was AI-translated and verified by a human editor