https://www.cnbc.com/2026/06/10/investors-are-fleeing-tech-stocks-in-record-numbers.html
Key points from the Article:
The AI hype trade might finally be cooling off. Investors are dumping Big Tech at a record pace after a strong jobs report pushed Treasury yields higher. The market is realizing the Fed may keep rates high for longer. That changes the math for all these AI names.
High rates are a problem for tech because AI infrastructure is insanely expensive. You can only justify spending that much if the profits show up fast. Even Alphabet raising cash through stock instead of taking on more expensive debt tells you valuations are starting to hit a wall.
But the money is not really leaving the market. It looks more like rotation. Funds are moving out of stretched tech and into boring value areas like banks, health insurers, and retailers. The kind of stuff that works when rates stay high and growth holds up.
My two cents: watch the bullwhip effect in chip stocks. Big Tech has been panic buying AI chips and custom silicon to lock in supply. But if hyperscalers even slightly cut capex, suppliers can get hit way harder than expected.
Broadcom’s recent move is a good example. The market is already extremely sensitive to any sign that AI demand, inventory hoarding, or capex growth is slowing.
TLDR: High rates are putting pressure on AI valuations. Money is rotating out of Tech and into value sectors like Financials, Health Care, and Retail. The bigger risk is chip names getting smoked if Big Tech slows AI spending even a little.
