Technology (XLK) took a hit this week as financing concerns mounted, dragging down key AI trade players and sending the S&P 500 (^GSPC) and Nasdaq (^IXIC) into negative territory for the week. CoreWeave (CRWV) and peer Nebius (NBIS) both closed out the week down more than 25%. Those companies along with Oracle (ORCL) are "probably at the bottom" of tech on free cash flow, noted Baird tech strategist Ted Mortonson on Yahoo Finance last week. Mortonson pointed to "a higher cost of capital" and "a lot of scrutiny now on circular finance." Nvidia (NVDA) CEO Jensen Huang sought to ease concerns, expressing optimism about CoreWeave. Nvidia's backing is significant, given that the AI chip giant holds roughly a 10% stake in the neocloud provider.
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