U.S. technology stocks plunged Thursday as concerns over artificial intelligence (AI) spending hammered Meta Platforms Inc. (NASDAQ:META) and Nvidia Corp. (NASDAQ:NVDA). However, Deepwater Asset Management’s Gene Munster maintained that the AI revolution remains in its early stages.
AI Spending Concerns Trigger Sharp Market Selloff
"Regarding the big AI selloff this week, we heard from Elon, Zuck, and Jensen that we’re still early, and I agree with them," Munster wrote on X, referencing to Space Exploration Technologies Corp.‘s (NASDAQ:SPCX) CEO Elon Musk, Meta’s CEO Mark Zuckerberg, and Nvidia’s CEO Jensen Huang.
The Nasdaq Composite sank 2.6%, its steepest decline since June, while Meta dropped about 7%, Nvidia fell approximately 4%, and SpaceX tumbled around 9%. The Philadelphia Semiconductor Index, the main benchmark for U.S.-listed chipmakers and closely tracked by the Invesco PHLX Semiconductor ETF (NYSE:SOXQ), plunged 6.7% as investors questioned AI infrastructure returns and financing costs.
On Wednesday, Meta reported $64.6 billion in quarterly revenue but posted negative free cash flow of $2.12 billion. It also projected 2026 capital expenditures of $135 billion to $145 billion and announced plans to raise capital through nonvoting shares.
Munster Sees Muse As Meta’s Future
Speaking on CNBC on Thursday, Munster argued that investors underestimate the potential of Meta’s personalized AI agents.
"Make no mistake, Muse is the future of the company," he said, describing autonomous commerce as its biggest opportunity.
Munster previously warned that Muse could threaten Alphabet Inc. (NASDAQ:GOOGL) Google’s $250 billion search business, arguing that AI assistants could increasingly handle purchases directly. He estimated Muse had approximately 10 million daily users, although Meta has not disclosed that figure.
AI Agents Could Reshape Global Commerce
Munster predicted Meta’s infrastructure investments would continue climbing.
"We’re still not done with this build out," he said, estimating next year’s capital expenditures could exceed $225 billion. He also predicted that personal AI agents would transform advertising and shopping. "The future of marketing is not to humans. It’s bot to bot," Munster said.
His outlook follows earlier optimism about Nvidia’s AI infrastructure opportunity, including Huang’s expectations for growing computing demand. Munster also highlighted SpaceX’s expanding AI computing business, challenging concerns about excess capacity.
However, Reuters noted that Matthew Maley, chief market strategist at Miller Tabak, offered a more cautious assessment Thursday, warning that investors were increasingly questioning returns on massive AI infrastructure investments. "It’s just becoming more and more evident to people that it’s going to take a lot longer," Maley said.
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