IREN Ltd, a key player in the AI infrastructure sector, saw its stock plummet by 8.40% during Friday's trading session, extending its losses from the previous day. This significant drop comes amid a broader selloff in AI-related stocks, despite initial optimism following Nvidia's strong earnings report earlier in the week.
The steep decline in IREN's stock price can be attributed to several factors. First, investors appear to be engaging in profit-taking after the initial AI rally sparked by Nvidia's record-breaking data-center revenue results. Additionally, macroeconomic concerns have weighed heavily on high-growth tech stocks. A stronger-than-expected jobs report has lowered the probability of a December rate cut, raising concerns about higher borrowing costs that could disproportionately affect companies in the AI sector.
Market analysts suggest that the ongoing selloff reflects a broader reassessment of AI stock valuations. Despite Nvidia CEO Jensen Huang's optimistic projection of a $3-4 trillion addressable market for AI infrastructure by 2030, investors have grown increasingly cautious. The dramatic reversal in IREN's stock price, which had initially surged by 10% at market open on Thursday before turning negative, underscores the volatile nature of AI-related investments in the current market environment.