AI rally stalls as CoreWeave concerns persist, tiny Seoul IPO sinks 30%

Oil hits $111 on Middle East attacks; Netflix, SpaceX earnings in focus

By LineZotpaper

Published20 October 2026

Updated20 October 2026

Read Time3 min

Sources6 outlets

Wall Street’s AI relief rally stalled in Asia and Europe on Tuesday, with credit concerns around neocloud provider CoreWeave and a disastrous debut for South Korean AI data centre firm Elice keeping investors on edge. Brent crude rose to $111 a barrel as Iran-linked attacks intensified, while markets await earnings reports from Netflix and SpaceX after the close.

U.S. stock futures gave up some of Monday’s optimism after a sharply negative session in Asia. South Korea’s Kospi led declines, closing in bear market territory, and European technology stocks pushed indices into the red during the morning session.

CoreWeave shares fell in premarket trade despite an upgrade from Goldman Sachs, which described the stock as being “toward the top of the quality rankings in the ecosystem.” HSBC disagreed, saying late Monday the shares could drop another 36% because of rising borrowing costs and slowing revenue growth for AI models. Elevated yields on Oracle debt also exposed persistent credit concerns in the AI trade.

Elice, a South Korean AI data centre firm, debuted on the country’s secondary market with shares falling over 30% on the day. Several other data centre IPOs have been cancelled, including Nvidia-backed Firmus, Blackstone-backed AirTrunk and Softbank unit SB Energy.

Gartner’s chief forecaster, John Lovelock, whose report fueled last week’s rout, stood by his view. “Everyone in the AI race is running for a last-man-standing position,” he said. “Pretty much every market that Gartner is tracking in our AI race is likely to collapse down to a duopoly.”

Oil prices rose to the highest since May as attacks by Iran and its proxies picked up in the Middle East, while Ukraine and Russia traded energy infrastructure blows. Ukrainian President Volodymyr Zelenskyy was set to meet U.S. envoys Steve Witkoff and Jared Kushner in Norway after President Donald Trump called again for a new leader of the country.

Earnings from Netflix and SpaceX are due after the market close. Netflix is expected to post 40% earnings growth for the third quarter, but the stock has traded lower after its last five quarterly reports. SpaceX, reporting for only the second time as a listed company, has shares above the $135 IPO price but off post-debut peaks. Elon Musk has pledged to give every American child a SpaceX share next year.

Nvidia is investing nearly $10 billion in Europe, committing funds to companies, universities and research institutions across the region. CEO Jensen Huang announced a strategic cooperation with the German government in Berlin, and has invested in startups including Genesis AI, Agile Robots and Reflex Aerospace. Mistral AI remains a key partner. Analysts noted that Europe’s regulatory reputation could rein in AI development across the continent.

Separately, anger over the cost of living and pressure on public services brought hundreds of thousands of protesters onto streets across several European countries. France saw the largest demonstrations, with more than 500,000 people marching. Most protested peacefully, but some looted and vandalised shops, set fire to city halls and attacked police officers. Protests also took place in Italy, Spain, Portugal and Albania.

Analysis

Why This Matters

The AI stock sell-off signals growing investor scepticism about the profitability of the AI infrastructure buildout, with warnings of a market shakeout to a duopoly.
CoreWeave’s credit troubles and cancelled IPOs suggest financing for data centre projects is tightening, which could slow AI capacity expansion.
Rising oil prices and geopolitical tensions add inflation pressure, complicating central bank policy just as earnings season tests market sentiment.

Background

AI stocks have been on a tear for much of 2025, driven by surging demand for computing power and massive capital spending by hyperscalers and neocloud providers. However, recent analyst reports have questioned the return on that investment, pointing to slowing revenue growth for AI models and rising borrowing costs. Gartner’s forecast that many AI markets will collapse to a duopoly contributed to last week’s rout. Meanwhile, oil prices have been climbing amid Middle East instability and the Russia-Ukraine conflict, while European protests reflect widespread frustration over the cost of living.

Key Perspectives

Gartner (John Lovelock): The AI race is a last-man-standing contest and most markets will end in a duopoly, justifying the sell-off. Goldman Sachs: CoreWeave stock is toward the top of quality rankings in the ecosystem, offering a contrarian buy opportunity. HSBC: CoreWeave could fall another 36% due to rising borrowing costs and slowing AI model revenue growth. European protesters: Rising costs of living and deteriorating public services are driving mass demonstrations across the continent, with some turning violent.

What to Watch

Netflix and SpaceX earnings reports tonight: subscriber and engagement numbers, and forward guidance, will be key.
CoreWeave’s debt yields and any further credit rating actions; Oracle debt spreads as a bellwether for AI financing.
Oil price trajectory and any escalation in Middle East or Ukraine-Russia energy infrastructure strikes.
Whether more data centre IPOs are pulled or if the Elice debut signals a broader IPO market chill.

Sources

AI rally fades away from Wall Street as a tiny IPO makes big waves · Tech
AI rally fades away from Wall Street as a tiny IPO makes big waves · US Top News and Analysis
SK tech firm's IPO flop signals investor concerns over AI · Semafor
Data center stocks slide as Korea IPO plunges 30%, pressuring tech sentiment · US Top News and Analysis
Live updates: Market nervousness persists as the AI selloff deepens · CoinDesk: Bitcoin, Ethereum, Crypto News and Price Data
Netflix will report earnings Tuesday with its stock down 26% this year · Quartz

Checked

12 claims in this story checked against 1 source: 8 supported.

Show each claim

SupportedThe AI relief rally stalled in Asia and Europe.Tech: “Wall Street's AI relief rally hit a wall in Asia and Europe”
SupportedCredit concerns around CoreWeave persisted.Tech: “A negative close for CoreWeave, as well as elevated yields on Oracle debt, expose persistent credit concerns in the AI trade.”
Partly supportedThe headline says Elice’s tiny IPO fell 30%.Tech: “South Korean AI data center firm, Elice, debuted as a small IPO on the country's secondary market, but shares made a big nosedive, falling over 30% in the trading debut.”
SupportedBrent crude rose to $111 a barrel.Tech: “$111 oil: Brent crude, the international oil benchmark, rose to the highest since May early Tuesday”
Partly supportedCredit concerns around CoreWeave and Elice’s debut kept investors on edge.Tech: “A sharply negative session in Asia shows jitters remain around technology stocks.”
SupportedGoldman Sachs described CoreWeave stock as being “toward the top of the quality rankings in the ecosystem.”Tech: “Goldman Sachs, which described the stock as being “toward the top of the quality rankings in the ecosystem.””
SupportedHSBC said CoreWeave shares could drop another 36% because of rising borrowing costs and slowing revenue growth for AI models.Tech: “HSBC disagrees, saying late Monday the shares could drop another 36% because of rising borrowing costs and slowing revenue growth for AI models.”
SupportedJohn Lovelock said, “Everyone in the AI race is running for a last-man-standing position.”Tech: “saying, “Everyone in the AI race is running for a last-man-standing position.””
SupportedJohn Lovelock said, “Pretty much every market that Gartner is tracking in our AI race is likely to collapse down to a duopoly.”Tech: “Pretty much every market that Gartner is tracking in our AI race is likely to collapse down to a duopoly.”
Partly supportedSeveral data centre IPOs have been cancelled, including those of Firmus, AirTrunk and SB Energy.Tech: “Other data center firms have cancelled their IPO plans, including Nvidia-backed Firmus, Blackstone-backed AirTrunk and Softbank unit SB Energy.”
Partly supportedNetflix is expected to post 40% earnings growth for the third quarter.Tech: “Netflix is expected to post 40% earnings growth for the third quarter, according to LSEG.”
SupportedMore than 500,000 people marched in France’s demonstrations.Tech: “France saw the largest demonstrations at the weekend, with more than 500,000 people marching.”