AI Infrastructure Stocks Face Critical Earnings Test Amid Market Correction

Key points

• The Nasdaq Composite has fallen nearly 12% from its October 6 record, entering correction territory, while the S&P 500 dropped 2.7% last week.
• Constellation Energy reports Monday, with analysts expecting earnings of $3.72 per share; the stock is down 30.2% year-to-date but has beaten estimates in the last two quarters.
• CoreWeave reports Tuesday, with consensus estimates cut 12.6% over 90 days; the stock is down 43% in the past month, reflecting volatility in AI computing demand.
• Nebius Group reports Thursday, with shares up 48.9% year-to-date despite a 41% monthly decline, highlighting sensitivity to AI cloud infrastructure news.
• Applied Materials and Cisco both report Thursday, with analyst estimates rising 10.5% and 15.4% respectively over 90 days, suggesting potential resilience in semiconductor and networking demand.

Background

This week's earnings come after a recent AI trade unwind, where major tech firms reported rising cash burn and weak returns, causing the AI trade to lose $5 trillion in value since October. Investors have rotated into defensive sectors, demanding proof of profitability over speculative growth.

Why it matters

These earnings will determine if AI infrastructure spending remains intact despite market concerns. The results, combined with inflation data, will shape expectations for Federal Reserve policy and the broader AI investment cycle.

What to watch

Investors will monitor management commentary on capital expenditure, customer commitments, and backlog. The next major catalyst is Nvidia's November 17 earnings report, which will provide a broader assessment of AI ecosystem demand.