The vast amount of capital needed to fund the artificial-intelligence build-out is forcing tech giants to hunt for ever-larger sums of cash—and Wall Street is raising a bright red flag.

Signals from Meta Platforms that it could soon go on a cash-raising spree helped trigger another massive rotation trade on Thursday, with investors dumping stocks connected to the AI boom and piling into almost everything else, from U.S. Treasurys to the beaten-down shares of home builders and software companies.

An already nervy market was also unsettled by disappointing earnings from Tesla and fresh tensions in the Middle East, which propelled oil prices to their highest levels since May.

Shares of Meta fell 7% Thursday, erasing $124 billion from the company’s market cap. All manner of other stocks tied to the historic data-center build-out also dropped, in many cases sharply, from so-called hyperscalers, like Alphabet and Amazon.com, to manufacturers of cooling equipment, such as Vertiv Holdings.

The PHLX semiconductor index, including the likes of Nvidia and Micron, dropped 6.7%. SpaceX, which on Tuesday reported a profitable quarter and said it might merge with Tesla, declined 9.1%. Tesla fell 3.1% after the carmaker’s adjusted net income slid.

Overall, the tech-heavy Nasdaq composite logged its worst day since June, tumbling 2.6%. The S&P 500 fell 1.2%, while the Dow Jones Industrial Average ticked up less than 0.1%.

The rally in bonds was particularly noteworthy, sending the yield on the 10-year Treasury note tumbling back below 5% in its largest one-day drop since March 2023, when markets were gripped by a regional banking crisis.

The big moves came after Meta announced plans Wednesday to create a new class of nonvoting stock to raise the capital it needs for developing and serving AI models. Initial excitement over the company’s record third-quarter revenue quickly gave way to mounting anxiety over how the Facebook parent and its peers will secure enough capital to fund the AI race.

“The growing concern with AI isn’t about technology anymore,” said Michael Antonelli, a market strategist for Baird Private Wealth Management. “It’s ‘how can we all fund this at once?’ ” A regulatory filing from Meta noted that recent significant capital raises from peers like Alphabet and SpaceX, alongside anticipated fundraising from Anthropic and OpenAI, have created an increasingly challenging fundraising environment.

As a result, the company would move proactively to raise funding before competitors absorb the market’s available capital. The company also disclosed an updated figure on its future spending commitments, which had risen to roughly $825 billion from nearly $700 billion in July.

Stocks more removed from the AI trade generally performed well. Those included consumer staple companies like Clorox, which rose 4.6%, and regional banks like M&T Bank, which climbed 1.5%.

This is hardly the first time investors have fled AI stocks. Concerns over an AI bubble have flared whenever competition intensified, growth showed signs of slowing or data-center operators reported construction logjams. More recently, elevated interest rates and geopolitical uncertainty have raised doubts about whether debt-laden developers can sustain their rapid expansion.

Once the main engine driving the market, the AI trade has hit a wall in recent months. After hundreds of billions of dollars poured into infrastructure build-outs, investors are growing increasingly skeptical that there will be enough user demand to generate commensurate returns. Meanwhile, tech giants like Amazon, Alphabet and Microsoft, are taking on heavy debt loads to fund their expanding capital expenditures, raising fears that rising borrowing costs will squeeze profit margins.

Meta reported Wednesday that its free cash flow went negative for the first time since it became a public company. On a call with analysts and investors, Meta executives didn’t reveal how much money they’re planning for capital spending in 2027, but said they “expect to continue investing aggressively.”Some analysts, meanwhile, said that Thursday’s huge rally in Treasurys likely reflected investors rebalancing their portfolios more than fundamentally shifting their economic outlook.

Still, a slowdown in the pace of spending by tech companies could have broader implications, potentially cooling inflation and slowing economic growth, both of which would provide a boost to bonds by reducing pressure on the Federal Reserve to raise interest rates.

The yield on the 10-year note settled at 4.952%, according to Tradeweb, down from 5.145% Wednesday.

If there was any good news in the tech sector Thursday, it was that prices remained relatively stable on CoreWeave bonds, which were at the center of investors’ anxieties last week. The company’s bonds due in 2032 traded just under 80 cents on the dollar, down from almost 90 cents last month but only slightly lower than Wednesday, according to MarketAxess.

A relatively new AI cloud computing company, CoreWeave has come under particular pressure because it has needed to rely on debt to fund its infrastructure build-out—unlike hyperscalers, which can also tap in to the cash flow from their existing businesses.

“The financing constraint over just the last three to four months has become real,” said Jim Russo, portfolio manager at AllianceBernstein. “It’s become a real headwind to growth as we move from 2026 into 2027,” especially for companies that are more dependent on external financing.