AI investing sector had a rough week with key ETFs down 4-29% and major tech stocks falling up to 25%, as investors question profitability and analysts suggest taking profits.

The artificial intelligence investing sector experienced a challenging week, with the Global X Artificial Intelligence & Technology ETF falling 4% this week (8% for October) and the iShares Semiconductor ETF dropping 29% from its recent high. Major AI-linked tech stocks also saw significant declines on Friday, including Intel down 25%, Micron down 5.5%, and Nvidia down 4%. Amazon fell 2% and Google was down 1%, with Google experiencing its worst trading day ever on Thursday after reporting a drop in core advertising sales revenues and falling over 10% after earnings on Wednesday.

Market professionals are expressing concern about the AI trade, citing a deceleration in sales from frontier algorithm maker Anthropic and large tech companies pulling back on capital expenditures. Investors and traders emphasize the need for AI to demonstrate substantial profits to justify the ongoing build-out. Analysts from Cboe Global Markets, YieldMax, and Millbank Dartmoor Portsmouth suggest it may be time for investors to take profits or hedge risks, with some questioning the recent AI boom.