AI stocks melt down again. What’s going on? | CNN Business

Tech stock traders can be an impatient bunch. But lately, they’ve grown seriously ticked off about the high price they’ve paid to get into the AI game without the profit boost they were expecting. The Nasdaq, a barometer for the tech industry, was set to sink another 1.2% Friday, an overhang from yet another massive sell-off in South Korea, whose Kospi index fell 5.8%. The Nasdaq has ended every day this week in the red and has fallen more than 6% from its all-time high set on June 2. Investors are right to be cautious: AI stock valuations have been flying high for several years, built mainly on the technology’s promise – not the bottom-line profit growth that fuels most companies’ stock price increases. It’s not that AI demand is in a slump – quite the opposite. But the industry’s explosive growth has forced companies to spend and borrow tens of billions of dollars to build and develop the technology – without the immediate results to show for it. It’s not exactly Big Tech’s fault. AI has become an incredibly expensive endeavor. Surging demand for the technology has fueled a data center boom, requiring massive numbers of high-powered chips that semiconductor