The Fed Just Hiked Rates for the First Time Since 2023. 3 AI Stocks That Could Feel It Most
The Federal Reserve raised interest rates by 25 basis points to help combat inflation.
Overview
The Federal Reserve just did something it hasn't done since July 2023. The Federal Open Market Committee (FOMC) voted 12-0 to raise the federal funds rate by a quarter point, to a range of 3.75% to 4%. New Chairman Kevin Warsh framed the move as overdue: Inflation remains too high, and the committee wants a faster path back to its long-term goal of 2%.
Rising interest rates matter for the artificial intelligence (AI) infrastructure boom because the build-out is no longer a cash-only story. The hyperscalers building data centers and buying chips have been flooding the bond market over the last year. A rate hike does not bankrupt big tech, but it does change the math on the next megawatt and the next graphics processing unit cluster.
Details
Three names capture the split. Nvidia (NASDAQ: NVDA) is printing cash, while Oracle (NYSE: ORCL) is burning it like there's no tomorrow. Meanwhile, Amazon (NASDAQ: AMZN) is writing an enormous check and will need to keep tapping the market to pay for its data centers.
Source
Originally published at www.fool.com.