AI Stocks Fall Up To 5% As Nasdaq Sell-Off Hits E2E Networks, ESDS Software
Indian AI-linked stocks declined on Monday following a sharp sell-off in US technology shares. E2E Networks hit its 5% lower circuit, while ESDS Software and MTAR Technologies also fell. Investors are increasingly concerned about rising AI infrastructure spending, uncertain returns and growing debt dependence, raising fears of valuation corrections globally
Shares of Indian artificial intelligence (AI)-linked companies declined up to 5% on Monday, following a sharp sell-off in US technology stocks that raised concerns about valuations and rising infrastructure expenditure.
The weakness followed a 3% decline in the Nasdaq Composite on Friday, its steepest single-session fall since June. The S&P 500 also slipped 1.8%.
Investors are increasingly questioning whether substantial investments in AI infrastructure will generate adequate financial returns.
E2E Networks extended its losses, hitting the 5% lower circuit for the second consecutive trading session.
ESDS Software Solutions declined more than 3%, while MTAR Technologies fell up to 5%, continuing its previous session's weakness.
Black Box, a technology infrastructure and digital solutions provider, dropped more than 1%.
E2E Networks and ESDS Software operate in cloud computing and data centre services, which support AI applications and computing workloads.
MTAR Technologies supplies precision engineering products across industries.
The domestic declines followed weakness in global technology shares, with investors reassessing companies linked to the AI investment cycle.
More than $2 trillion was reportedly erased from the Nasdaq 100's market value during October as concerns intensified over the profitability of large-scale AI investments.
Investors are increasingly scrutinising spending on data centres, advanced chips, electricity supply and computing infrastructure.
Although demand for AI services remains an important growth driver, uncertainty persists over whether the resulting revenues can justify substantial capital expenditure.
Concerns have also emerged over growing reliance on debt to finance AI infrastructure expansion.
Such financing pressures could make technology companies more vulnerable to changing economic conditions.
The sell-off highlights how uncertainty surrounding global AI investments can influence investor sentiment towards Indian technology infrastructure businesses.
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