On Thursday, US AI stocks suffered a major setback, with market sentiment shifting from the previous day's optimism to scrutiny over whether the massive capital expenditures in AI can deliver returns. The Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX both fell over 6% in early trading, NVIDIA dropped over 4%, AMD fell about 8%, and Lam Research plunged over 10%. Meta was down over 7% intraday, and the price of its five-year credit default swap (CDS) rose to a historical high, highlighting investor concerns about the scale of AI investments, future financing needs, and the return cycle. Meta had previously raised its 2026 capital expenditure guidance to $135 billion to $145 billion and disclosed future spending commitments rising to $825 billion. Meanwhile, attacks in Saudi Arabia pushed Brent crude oil above $110/barrel, exacerbating energy costs and inflation risks, further prompting investors to reduce exposure to high-valuation tech assets and shift towards bonds.