Higher-than-expected US inflation triggered a sell-off in technology and AI stocks. Companies that shifted from Bitcoin mining to data centers also couldn’t escape the decline.
The widespread sell-off in US stock markets has hit companies operating in Bitcoin mining and artificial intelligence infrastructure hard. Shares of TeraWulf, Core Scientific, Cipher Mining, and IREN all lost more than 12% of their value in a single trading day.
TeraWulf shares fell approximately 12.64%, while Core Scientific dropped 12.44%, Cipher Mining 12.35%, and IREN 12.2%. This shows that the share performance of mining companies is becoming increasingly dependent not only on the price of Bitcoin, but also on risk appetite and interest rate expectations in the technology sector.
At the heart of the sell-off are the higher-than-expected US inflation figures. Concerns that persistent inflation could push the Federal Reserve to keep interest rates high for longer or consider another rate hike have accelerated the exit from companies priced with high growth expectations.
The S&P 500 fell 1.1%, its sharpest daily loss since July 29. The technology-heavy Nasdaq Composite declined 1.9%. AI data center operator CoreWeave dropped 16%, Nebius 11%, and Oracle 9%.
Many Bitcoin mining companies have recently begun leasing their energy infrastructure to AI and high-performance computing clients. While this transformation creates new revenue streams, it also makes companies more vulnerable to valuation fluctuations in the technology and AI sectors.
Daily declines alone do not determine the long-term performance of companies. However, investors are now paying more attention not only to large AI contracts but also to the financing costs, delivery schedules, and profitability of these projects.
*This is not investment advice.
Continue Reading: Sharp Crash in Bitcoin Mining Stocks: Four Major Companies Drop More Than 12% in a Single Day