2025-12-18: AI Tech Stocks Under Pressure Amid Rotation to Value Sectors

This analysis is based on the Seeking Alpha article [1] published on December 18, 2025, which highlights AI-driven tech stocks under pressure and a rotation to value sectors. The Technology sector declined by 2.27% on December 17 amid the AI stock selloff, with major players like Oracle (ORCL), Broadcom (AVGO), and Nvidia (NVDA) dragging the market lower [0][2]. The Dow Jones Industrial Average confirmed four straight sessions of losses from December 12–17 (-0.53%, -0.37%, -0.55%, -0.59%) [0][3], while the Nasdaq Composite fell 1.81% on December 17, extending a broader tech selloff that the article attributes to a fourth consecutive decline on December 18 [0][1].

Value-oriented sectors outperformed on December 17: Consumer Defensive (+0.36%), Energy (+0.22%), and Basic Materials (+0.06%) [0][2]. This rotation is driven by concerns over AI spending and financing timelines, amplified by a Financial Times report (via CNBC) that Blue Owl Capital paused financing for Oracle’s $10 billion Michigan data center [2]. The equally weighted S&P 500 (RSP) declined by only 0.35% on December 17—far less than the Nasdaq’s 1.81% drop—indicating broader market sentiment remains more resilient than tech-heavy indices [0]. An upcoming U.S. inflation report on December 18 may further impact market dynamics [4].

1. Rotation Drivers
   : The shift from mega-cap tech to value sectors reflects investor skepticism about the short-term payoff of AI infrastructure investments, exacerbated by the Blue Owl financing pause [2].
2. Market Sentiment Discrepancy
   : The resilience of the equally weighted S&P 500 (RSP) suggests the selloff is concentrated in tech stocks rather than a broader market decline [0].
3. Cross-Region Impact
   : The tech selloff has spilled over to Asian markets, with Japanese tech stocks (including SoftBank) declining amid similar AI spending concerns [2].

• Risks
  : Uncertainty surrounding AI infrastructure financing and project timelines may continue to pressure tech stocks [2]; a prolonged rotation from growth to value could disrupt 2025’s mega-cap tech market leadership; the upcoming inflation report may amplify volatility [4].
• Opportunities
  : Value-oriented sectors (Consumer Defensive, Energy) are experiencing outperformance amid the rotation, offering potential relative strength [0][2].

• Tech Sector Performance
  : Technology sector down 2.27% on December 17; major AI stocks (ORCL, AVGO, NVDA) contributed to losses [0][2].
• Index Movements
  : Dow Jones (four straight losses December 12–17); Nasdaq Composite (1.81% drop December 17, fourth consecutive decline December 18 [0][1]); equally weighted S&P 500 (RSP) down 0.35% December 17 [0].
• Sector Rotation
  : Value sectors (Consumer Defensive +0.36%, Energy +0.22%) outperformed December 17 [0].
• Driving Factors
  : AI investment financing jitters (Blue Owl pause on Oracle data center funding) [2]; upcoming inflation report [4].
• Data Gaps
  : December 18 closing data for the Nasdaq is pending to confirm the fourth straight session; root causes of December 18 pre-market declines require further details [1].