r/investing
CNBC: Investors are fleeing tech stocks in record numbers
High rates and slowing AI capex crush tech valuations, triggering a bullwhip effect risking downstream chipmakers like Broadcom.
- High interest rates make funding expensive AI infrastructure unsustainable, capping tech valuations.
- Institutional money is rotating out of overextended tech into beaten-down value sectors.
- The bullwhip effect from hyperscalers trimming AI capex will severely slam downstream chip suppliers.
https://www.cnbc.com/2026/06/10/investors-are-fleeing-tech-stocks-in-record-numbers.html
The massive AI hype train is finally losing steam. Investors are dumping Big Tech stocks at a record pace following a hot jobs report that spiked Treasury yields. This shift signals that the Federal Reserve will keep interest rates higher for longer, forcing a major reality check across the market.
High rates are brutal for tech firms because funding expensive AI infrastructure has become unsustainable without immediate corporate profits. Even Alphabet is issuing stock to raise cash instead of taking on expensive debt, proving that tech valuations are hitting a ceiling. The cash isn't leaving the market entirely; it’s just rotating. Institutional money is fleeing overextended tech and flooding into beaten-down value sectors like Commercial Banks, Health Insurers, and legacy Retailers that actually thrive in a sticky, solid-growth economy.
My two cents: Keep a close eye on the bullwhip effect hitting downstream chip makers like it did with Broadcom last week. Big tech hyperscalers have been panic buying and hoarding custom AI silicon to secure supply. The moment these giants trim their capex by even a fraction, downstream suppliers get slammed by an amplified drop in demand. Broadcom's recent stock slide proves the market is already hyper-sensitive to this exact supply-chain fragility.
/TLDR: High rates are squeezing overextended AI valuations, rotating capital from Tech into value sectors like Financials and Retail. Downstream, the bullwhip effect poses a massive risk to chipmakers like Broadcom as tech giants slow down their inventory hoarding.
Counter point: the funding is already secured. Non returnable non refundable orders have been placed through 2027 and into 2028. Buy more stocks while people panic sell.
Counter counter point: this is already public knowledge and is priced in. Now that the stock price is already high, you can just sell that and get collect low risk interest that goes well beyond 2028.
Why are you booing him? He's right. Future orders are already priced and thats the problem. The stock price doesn't accurately reflect future earnings. Orders aren't priced out to 2050. Wait for the dust then buy.
Because these stocks left fundamentals a LONG time ago. Fundamentally a stock SHOULD be priced at the present value of all future dividend payments + the value of all current assets minus liabilities. But that’s clearly not where we’re at.
Has it? Has anyone ever made a promise to pay for something then the money wasn’t there when the bill came due?
There are huge implications for investment money for the AI and other industries impacted by the strait closure that are incalculable.
There are legally binding contracts signed. The money is already there, funding is secured. The current build outs will happen over the next 5 years. Beyond that I don't know.
With force majeure clauses and any other reason not to pay. It’s expected to happen, but so were the half of data centers in the US already scrapped or delayed ad infinitum.
They can invoke deferral clauses. We saw this play during the 2000 Telecom Boom. Cisco and Nortel had massive, supposedly secured multi-year order backlogs from telecom providers. funding dried up, those orders weren't canceled outright initially, they were just delayed indefinitely. Cisco had to write off billions in inventory because the secured demand vanished.
Shareholders will force a pivot. Luck what happened to Zuck with the metaverse. Cash was there, margins dropped and people sold that shit until Zuck pivoted.
I’ll believe this when hard drive storage prices drop to 1/3 of what they are now - which is what they were like a year ago only.
Prices never go back down. Two years from now you'll wish you got storage at current prices. Greed is a hell of a thing.
The only reliable way to lower storage prices is competition.
Seems like a good time to keep buying tech stocks!
Rotating into retail with shrinking discretionary income, low savings rates, and weak consumer confidence is a terrible idea. I'm not convinced on financials either - interest rate hikes help, but you need demand, which will not be there on the corporate side or consumer spending.
\-5% from ATHs.
And yet we are still close to ATH in all indexes.
ai generated slop
Time to buy
The market often confuses a great story with a great valuation.
As someone who likes the analysis side, I do acknowledge people get bored by it and want a hyped up story & romance with their stock picks. Institutional investors for fall this too.
Comparative jokes help.
Definitely dont believe this shits money got moved to cover spacex ipo. Expect a pick up when those that dont get allocated shares but back into distressed tech stocks.
Looking forward to the PPI report tomorrow!
lol we are in the end of the most profitable earnings periods ever. June OPEX is supposed to be the largest option expiration event ever. We just had Friday and Tuesday with like 5% drops each. This is hedging and testing support heading into opex next week. Who knows what happens after that. And Spacex this week
They will be back.