E2E Networks, ESDS Software and two other AI-linked shares fall up to 5%

Shares of E2E Networks, ESDS Software Solutions, MTAR Technologies and Black Box were trading in the red on Monday after falling in the earlier session. The stock of E2E Networks hit its 5% lower circuit for the second straight day. The selling was triggered by the 3% fall in the Nasdaq Composite in the prior session. Investors are reevaluating the cost to build out AI infrastructure and whether it will generate returns proportional to the capital invested.

E2E Networks hits its 5% lower circuit for a second session

Market data showed that E2E Networks extended its losses by hitting the 5% lower circuit on Monday, marking a second consecutive session at that limit.

E2E Networks provides cloud computing and data centre services that support AI applications and computing workloads.

ESDS Software Solutions declines more than 3%

ESDS Software Solutions declined by more than 3% during Monday's session, according to market data.

ESDS Software Solutions provides cloud computing and data centre services that support AI applications and computing workloads.

MTAR Technologies falls up to 5%

MTAR Technologies fell by up to 5% on Monday, extending its decline from the previous session, market data showed.

MTAR Technologies supplies precision engineering products to various sectors.

Black Box falls more than 1%

Black Box fell by more than 1% on Monday, according to market data.

Black Box provides technology infrastructure and digital solutions.

Nasdaq falls 3% as S&P 500 declines 1.8%

The Nasdaq Composite dropped 3% in Friday’s trading session. It was the index’s biggest one-day decline since June, according to market data.

The S&P 500 declined 1.8% during the same session.

AI infrastructure costs draw scrutiny after USD 2 trillion Nasdaq 100 loss

Over $2 trillion was wiped from the Nasdaq 100 last month as investors questioned whether the hundreds of billions of dollars of investment in AI infrastructure would actually yield returns sufficient to justify the investment, according to market data.

One major concern in building out the required infrastructure for AI is the cost of building out such large data centers, silicon, power and compute.

The concerns also included the growing reliance of AI companies on debt funding.

Ritesh Jain questions hyperscaler capital expenditure and business moats

Ritesh Jain, founder of Pinetree Macro, said the AI trade could enter a more prolonged and damaging phase.

Jain said markets were questioning heavy hyperscaler capital expenditure, including spending in cases where companies had negative cash flow, and whether those businesses had a moat. He also said that some world-class companies were caught in what he called the AI bubble's apparent burst.