Global AI infrastructure stocks fell on Tuesday, October 13, following a worldwide sell-off. Shares of Hitachi Energy India, GE Vernova, and CG Power dropped as investors reacted to market shifts. Broadcom CEO Hock Tan said, "financing this massive buildout will be the next major impediment for the sector," impacting global sentiment.

The meltdown seen across memory chip stocks and AI-related companies across the globe may have boosted the fortunes of Indian IT companies, but stocks that contributed to the AI infrastructure buildout, are facing losses on Tuesday, October 13, in-line with the global sell-off.

Shares of Hitachi Energy India, and GE Vernova T&D are down between 3.5% to 4% each on Tuesday, while those of CG Power and Siemens Energy India are also trading with losses between 1.5% to 2.5%. Not only the AI infra names, the optic fibre cable companies, Sterlite Tech and HFCL, which have seen their share price go up anywhere between 3x to 10x this year so far, are also trading with losses of up to 5%.

Global Semiconductor stocks sold-off on account of multiple factors on Tuesday. The biggest of them all being the news about increasing competition from China with regards to a memory chip developed by CXMT, which competes directly with Korean giants SK Hynix and Samsung. Both the Korean chip giants sold-off sharply on Tuesday, dragging the KOSPI down with it. Japanese memory firm Kioxia Holdings Corp. also fell more than 12%.

Another reason behind the fall is remarks made by Broadcom CEO Hock Tan who linked market sentiment surrounding AI stocks to a casino, and added that financing this massive buildout will be the next major impediment for the sector. The remarks have also sent the Nasdaq futures lower by over 250 points.

While stocks like GE Vernova, Hitachi Energy and CG Power do not build chips or AI models, they do build the electrical infrastructure, the transformers, HVDC systems, switchgears and turbines required to feed the AI data centers.

Most of these names have seen strong earnings growth and share price appreciation during the course of the year due to the large-scale AI spending by the hyperscalers and buildout of the data centers. The surge in these stocks have also taken their valuations beyond their historical multiples.

Shares of Hitachi Energy India are now down over 5% but are still up 60% on a year-to-date basis.

Siemens Energy India's shares are still up 20% for the year, despite the 3% drop seen today.

Shares of GE Vernova T&D are down nearly 4% on Tuesday but are still up close to 30% for the year.