AI Funding Concerns Rattle Wall Street

Wall Street struggled last week as worries about financing the artificial intelligence boom overshadowed strong earnings. Meta Platforms reported negative free cash flow for the first time since its 2012 initial public offering, and its shares fell 7% Thursday. The Dow Jones Industrial Average dropped more than 1% Friday as oil prices rose amid fears of renewed U.S. strikes against Iran; the Nasdaq posted a slight loss and the S&P 500 was modestly lower. For the week, the Dow rose 0.4%, the S&P 500 fell 0.5% and the Nasdaq slipped 0.7%.

Investors questioned whether companies could secure enough funding for AI infrastructure as borrowing costs rose, despite strong demand. SpaceX revenue figures reported Tuesday evening helped lift AI stocks early in the week, but Meta said Wednesday evening its long-term plans could require hundreds of billions of dollars in additional financing. CoreWeave fell 10% Thursday and more than 10% for the week, following a drop of more than 25% the prior week. Nvidia CEO Jensen Huang said Thursday that demand for capital was much greater than its availability; Nvidia shares fell roughly 1.5% for the week. CNBC Investing Club said it bought 10 shares of GE Vernova during Thursday’s sell-off, its first AI-related purchase in five weeks, and raised the stock to its buy-equivalent 1 rating, citing confidence in long-term power demand.

The club also reduced its broader AI exposure. It sold Broadcom on Friday, locking in an average gain of roughly 128%, and trimmed CrowdStrike to reduce the position size, realizing a gain of about 187%. CrowdStrike and Palo Alto Networks each rose more than 11% last week after security flaws in PHP triggered a global security scramble. CrowdStrike CEO George Kurtz told CNBC Friday that the company had observed AI-powered attacks doubling each month from July through September. Meta’s Muse AI agent had shown promising early traction, but the club kept its hold-equivalent 2 rating and $800 price target while seeking clarity on how Meta will fund and monetize its investments. Meta lost more than 9% for the week. A regulatory filing said the company might need to raise “hundreds of billions of dollars” over several years beginning as early as fall 2026. It also described plans for Class C non-voting shares in January, with one Class C share for each Class A share, effectively facilitating a two-for-one stock split while preserving CEO Mark Zuckerberg’s voting control.

The article also reported gains among defensive holdings as investors rotated away from AI stocks: Kimberly-Clark rose 4.3%, Home Depot 3.3%, and Johnson & Johnson 3.2%. Apple shares rose about 1.2% for the week as delivery waits for its foldable iPhone Duo exceeded three months; the phone became available for walk-in customers Friday. Apple also expanded its partnership with Qnity, which will make advanced films for the 18 Pro camera system. Qnity shares fell more than 4.5% for the week, compared with a decline of over 11% for GE Vernova.

Wall Street struggled last week as worries about financing the artificial intelligence boom overshadowed strong earnings. Meta Platforms reported negative free cash flow for the first time since its 2012 initial public offering, and its shares fell 7% Thursday. The Dow Jones Industrial Average dropped more than 1% Friday as oil prices rose amid fears of renewed U.S. strikes against Iran; the Nasdaq posted a slight loss and the S&P 500 was modestly lower. For the week, the Dow rose 0.4%, the S&P 500 fell 0.5% and the Nasdaq slipped 0.7%.

Investors questioned whether companies could secure enough funding for AI infrastructure as borrowing costs rose, despite strong demand. SpaceX revenue figures reported Tuesday evening helped lift AI stocks early in the week, but Meta said Wednesday evening its long-term plans could require hundreds of billions of dollars in additional financing. CoreWeave fell 10% Thursday and more than 10% for the week, following a drop of more than 25% the prior week. Nvidia CEO Jensen Huang said Thursday that demand for capital was much greater than its availability; Nvidia shares fell roughly 1.5% for the week. CNBC Investing Club said it bought 10 shares of GE Vernova during Thursday’s sell-off, its first AI-related purchase in five weeks, and raised the stock to its buy-equivalent 1 rating, citing confidence in long-term power demand.

The club also reduced its broader AI exposure. It sold Broadcom on Friday, locking in an average gain of roughly 128%, and trimmed CrowdStrike to reduce the position size, realizing a gain of about 187%. CrowdStrike and Palo Alto Networks each rose more than 11% last week after security flaws in PHP triggered a global security scramble. CrowdStrike CEO George Kurtz told CNBC Friday that the company had observed AI-powered attacks doubling each month from July through September. Meta’s Muse AI agent had shown promising early traction, but the club kept its hold-equivalent 2 rating and $800 price target while seeking clarity on how Meta will fund and monetize its investments. Meta lost more than 9% for the week. A regulatory filing said the company might need to raise “hundreds of billions of dollars” over several years beginning as early as fall 2026. It also described plans for Class C non-voting shares in January, with one Class C share for each Class A share, effectively facilitating a two-for-one stock split while preserving CEO Mark Zuckerberg’s voting control.

The article also reported gains among defensive holdings as investors rotated away from AI stocks: Kimberly-Clark rose 4.3%, Home Depot 3.3%, and Johnson & Johnson 3.2%. Apple shares rose about 1.2% for the week as delivery waits for its foldable iPhone Duo exceeded three months; the phone became available for walk-in customers Friday. Apple also expanded its partnership with Qnity, which will make advanced films for the 18 Pro camera system. Qnity shares fell more than 4.5% for the week, compared with a decline of over 11% for GE Vernova.