The Fed Hiked Interest Rates for the First Time in 3 Years. Are AI Stocks in Trouble?
The Federal Reserve raised interest rates for the first time since 2023 to combat inflation. Higher borrowing costs could disproportionately impact AI stocks, particularly those relying on debt funding for capital-intensive data center infrastructure. However, profitable AI companies with positive cash flows will be better positioned to weather rate increases, as they can self-fund expansion without relying on capital markets.