AI rally wobbles as U.S. equity fund inflows shrink to one-month low

The AI buzz has caused increased uncertainty as investors express concerns over the recent stability of the AI-driven market rally. U.S.-based equity funds saw reduced inflows amid the developing uncertainty.

U.S.-based equity funds experienced declining demand in the week through November 12th amid growing concerns about the long-term stability of the AI-driven market rally. The signals of a weakening labour market condition in October also add to the increasing uncertainty in the longevity of the recent market upsurge.

The U.S. equity funds drew only $1.15 billion from American investors during the week. The figure represents the smallest weekly net investment since October 15th, which saw $557 million in outflows in the seven days preceding October 15th. 

Tech stocks plummet as investors take caution on AI-driven rally

Tech stocks also plummeted, adding to the concerns about whether the upsurge will sustain in the days to come. The Nasdaq Composite Index dropped by 4.8% after hitting an all-time high of 24,019.993 towards the end of October. 

Large-cap funds also saw their weekly inflows cool off to $2.35 billion from $11.91 billion recorded a week ago. Investors exerted pressure on small and mid-cap funds, drawing $889 million and $1.36 billion from them, respectively.

The entire tech sector drew only $1.74 billion from investors, marking the smallest amount in almost a month. The healthcare escort secured $777 million, signifying the first weekly inflow after four consecutive weeks of outflows.

On the contrary, U.S. investors shifted their interests to the bond market. Bond funds raised weekly net investments to $8.96 billion in the week, from ‍$4.63 billion a ⁠week ago. Data show that investors were more interested in short- to intermediate-term government and treasury funds. 

They invested in short- to intermediate-term government and treasury funds, short- to intermediate-term investment-grade funds, and general domestic taxable fixed income funds. These funds drew notable investments of $3.01 billion, $2.06 billion, and $1.96 billion, respectively.

Wall Street’s AI-driven rally set to continue into 2026

Cryptopolitan reported on November 8th that Tech and AI stocks on Wall Street had their worst week since April, following a push from Wall Street investors to slow down on high-risk trades.

Stocks like Palantir and Oracle suffered dips, bringing the entire high-risk playground to its knees. Palantir fell 8% even after recording solid earnings, with the drop tied to its significant price-to-earnings ratio. 

Behavioral economics professor at William & Mary, Peter Atwater, stated that the AI company belongs to the same category as crypto, a sector termed risky by Wall Street investors. 

Towards the end of September, AI trade expanded beyond Big Tech. As previously reported by Cryptopolitan, Wall Street AI trading has expanded beyond Nvidia, Microsoft, Alphabet, Apple, Meta, and Tesla. The report highlighted. The gains trickled down to AI companies. Oracle, which surged more than 75% in 2025 when it introduced AI cloud services, attracted significant investments. Palantir surged 135% after AI demand shot. 

As discussions on the uncertainty of AI trends continue, major corporations and large companies have shown more proactive actions towards AI development.

Google announced that it will invest $6.4 billion in Germany’s cloud infrastructure and AI data centers, which are designed to house specialized hardware and massive datasets that power AI technologies. The investment will involve funding a new data center for Dietzenbach, near Frankfurt, and an existing facility in Hanau.

The tech giant has also recently signed a 15-year deal with energy conglomerate TotalEnergies, which will see the latter provide 1.5 terawatt-hours (TWh) of certified renewable electricity to Google’s Ohio data centers.

Earlier this year, Google also announced it had pledged $25 billion to expand data centers and develop AI infrastructure. The firm also announced its intention to invest $3 billion in advancing two hydroelectric power stations in Pennsylvania to help meet the growing demand for renewable energy in AI data centers.

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