The selloff across former bitcoin mining companies that have repositioned as AI compute providers accelerated on Thursday. Cipher Digital (CIFR), IREN (IREN) and TeraWulf (WULF) each fell roughly 10% and are now down as much as 40% from their respective all-time highs.
Selling pressure intensified after Bloomberg reported on Wednesday that Meta (META) is creating a new business unit, dubbed "Meta Compute", to commercialize excess GPU capacity by selling it to third-party customers and potentially hosting AI models in its own data centers. The report challenged the long-held assumption that AI compute capacity is scarce, raising the prospect of a more competitive supply environment.
The Nasdaq has reversed an early advance of nearly 1%, now down 0.6% in late-morning U.S. trade.
AI-related favorites, like Micron (MU), AMD (AMD), SanDisk (SNDK), and Intel (INTC) are lower by 4%-10%.
Meanwhile, some of the recently roughed-up Mag 7 names are seeing buying interest, with Apple (AAPL) higher by 4%, and Microsoft (MSFT) and Amazon (AMZN) each ahead about 1.5%. Tesla (TSLA), though, is down 7% even after reporting strong delivery numbers for June.
The decline in the Nasdaq appears to be taking some starch out of the bitcoin rally, with BTC pulling back to $61,500, still up 2.7% over the past 24 hours.
"Rate hikes are not happening," wrote Leeker Capital CIO Quinn Thompson, who for a few weeks has suggested market expectations of tighter Fed policy were off target. "The recent labor market stabilization showed its first signs of cooling, which will continue. Inflation will cycle lower in coming months and Warsh's comments yesterday were another clue."
"[Rate] cuts are the base case now," said investment strategist Rosanna Prestia this morning
One month ago, as markets were freaking out over May's blowout 172,000 jobs gain (since revised down to 129,000), Prestia said it was a one-off due to hospitality hires for the World Cup.
Now up just shy of 5% over the past 24 hours, bitcoin (BTC) has risen past the $62,000 level for the first time in about 10 days.
The price remains lower by about 13% on a month-over-month basis.
Securitize (SECZ), a tokenization specialist that brings stocks and funds onchain with partners like BlackRock and Apollo, made its public debut today, merging with a Cantor-sponsored SPAC.
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