Data center stocks slide as Korea IPO plunges 30%, pressuring tech sentiment

A South Korean cloud IPO that plunged about 30% on its market debut triggered a sell-off in data-center and neocloud stocks, stoking fears of overcapacity in AI computing. Elice Group, which raised roughly $150 million and has a market capitalization near $1.3 billion, was quickly compared to U.S. neocloud CoreWeave; CoreWeave fell roughly 4% at the open while peers Nebius and Iren also slid. HSBC highlighted debt-market strain and weakening large-language-model revenues, keeping a reduce rating on CoreWeave with a $39 price target implying substantial downside. Chip names including Micron, AMD and Nvidia also ticked lower as investors reassessed capital intensity across the AI stack.

The broader contention is that supply of specialized compute is outpacing revenue growth from AI customers, threatening profitability for many neocloud providers. Recent revenue decelerations at frontier AI firms - Anthropic’s growth dropped from 140% to 45% quarter-over-quarter, and OpenAI missed revenue expectations materially - underscore that enterprise and consumer AI sales may not cover planned capital spending. Gartner warns as many as 80% of neoclouds could fail as independent operators by 2030, arguing that excess capacity, freemium offerings and leveraged balance sheets will force consolidation down to a few survivors.