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.

Others on Wall Street echoed the sentiment.

"I see this is just another scare, right? We had DeepSeek, we had tariff crash, we had AI death scare," Moor Insights & Strategy founder and chief analyst Patrick Moorhead told Yahoo Finance.

"Because the numbers are up so big on the AI trade, people are looking for a reason to sell as opposed to a reason to buy," he added.

Dan Ives, senior managing director at Wedbush Securities, called the sell-off the "same script, different cast," noting that CoreWeave exited the second quarter with a revenue backlog of roughly $104 billion, reflecting customer commitments already in place.

"We view this as AI infrastructure's SaaSpocalypse moment and expect the same outcome," he said, referring to the software sell-off earlier this year sparked by fears of AI-driven disruption.

Meanwhile, commentary from chip equipment maker ASML (ASML) and contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSM) pointed to robust AI demand.

Meta data centers operate, Saturday, Sept. 5, 2026, near Social Circle, Ga. (AP Photo/Mike Stewart) · AP Photo/Mike Stewart

UBS strategists characterized the latest bout of volatility as more of a "recalibration of expectations" than a fundamental break in the AI investment story.

"We suggest investors focus on where AI spending is translating into sustainable earnings growth and broader enterprise and consumer adoption," wrote Ulrike Hoffmann-Burchardi, chief investment officer of Americas and global head of equities at UBS.

Ines Ferre is a senior business reporter for Yahoo Finance.

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