The Tech Selloff Deepens

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Luke Vargas (0:32)

A tech sell-off deepens even as Anthropic and TSMC report blockbuster revenues. Plus UBS, Molls leaving Switzerland for proposed new capital requirements.

Margo Patrick (0:45)

I think it definitely gets the Swiss lawmakers to sit up when UBS is saying, hey, we could just go and be a US bank or we could be taken over by a large US bank.

Luke Vargas (0:54)

And we've got the latest on the Trump administration's investigation into Representative Ilhan Omar as it seeks to strip her US citizenship. It's Thursday, October 15th. I'm Luke Vargas for The Wall Street Journal. And here is the AM Edition of What's News, the top headlines and business stories moving your world today.

Tech stocks are on pace for another rough day after yesterday's brutal sell-off. Finance editor Alex Frangos says that what had been a relatively placid stock market in recent months is now facing threats from all sides.

Alex Frangos (1:29)

The market's not far off its records and been driven a lot by the continued excitement over the AI expansion and build out. Sometimes markets get a little bit spooked that things have gone too far. The proximate cause yesterday was an inflation reading that was hotter than expected, that caused people to ratchet up expectations for the Fed to raise interest rates, that hit AI companies that have a lot of debt, and then that trickled through the market. There was already some latent jitters going on. There are these super, super high expectations for how fast AI is going to expand, how useful it's going to be in the economy, and how much money all the companies making the picks and shovels are going to make. And the market naturally gets a little worried sometimes that like, oh, maybe we've gone too far, maybe these expectations are too high, let's take our profits, let's go into something that's a little safer.

Luke Vargas (2:25)

And Alex says sell-off is pretty indiscriminate, with CoreWeave, NVIDIA and Micron all down off-hours, South Korea's tech-heavy index falling 7 percent, and European AI stocks like STMicro, Infineon and even ASML, which reported gangbusters earnings yesterday, tumbling in early trade.

Alex Frangos (2:44)

Yeah, I mean, expectations are super high, and right now the market's not in the mood for good news. They're basically shrugging it off and saying, yeah, we don't care that you have record profits. We don't care that you have demand until 2031 for your fancy lithography machines that make the chips, that power everything. They're basically saying expectations are too high for right now. But we've seen this before. I'd be the last person to predict that this is the beginning of the end or not the beginning of the end. We just really don't know.

But it's definitely got people's attention.

Luke Vargas (3:13)

Well, one company countering those AI concerns is Taiwan Semiconductor Manufacturing. The world's largest contract chip maker today posted another record quarter, with net profit surging 69% to just under $24 billion. That topped analyst expectations and marks six consecutive quarters of record earnings. Well, overnight, we also learned that Anthropic's quarterly revenue jumped 45% to nearly $17 billion. The company is preparing for a massive public debut as soon as next month, with investors expecting the cloud maker to reach more than $110 billion in annualized revenue by year end. And India could soon see its largest ever listing as GeoPlatforms plans to raise more than $3 billion in an IPO that would value the telecom company at $108 billion.

Owned by one of Asia's richest people, the company handles the majority of data traffic in a country with a population of more than 1.4 billion. The upcoming listing would come at a time when India has been hard hit by the energy shock stemming from the U.S.-Iran war, with the country's benchmark Sensex one of the worst performing markets in Asia this year.

We are reporting that executives at Zurich-based UBS, Switzerland's last remaining flagship global bank, are considering a once unimaginable move out of the country. Our Margo Patrick has more on this story. Margo, if UBS isn't Swiss, what is? I'm just curious, tell us what is prompting these contingency plans that you report are occurring inside the bank?

Margo Patrick (4:51)

So UBS is thinking about leaving Switzerland, which is where it's been since 1862 It's thinking about leaving because it is being faced with some quite punitive capital plans in the country. So Switzerland is beefing up, it's too big to fail banking law. So that was a response to the 2008 financial crisis and having to bail out UBS way back then.