AI’s Suppliers Report Rising Demand, and Their Shares Fall

NEW YORK, Oct. 22 — FiveFive companies that sell the AI build-out its storage, power, cooling, wiring, circuit boards and network gear reported on Thursday that demand is still climbing, and their shares fell anyway.

TTM Technologies, whose third-quarter data-center and networking sales rose 115 percent from a year earlier, saw its shares fall 27.67 percent. Western Digital, Bloom Energy and Comfort Systems USA, which reported after the close, had already fallen 6.43 to 8.70 percent during the regular session, and fell further in after-hours trading. Nokia’s American shares fell 14.81 percent.

The selling ran well beyond them; the Nasdaq Composite fell 2.60 percent. “Investors aren’t (yet) saying that AI is a business dud, to be clear, just that companies perhaps don’t need to go and construct all this stuff so fast,” Robinson Meyer, Heatmap’s executive editor, wrote on Thursday.

Bloom Energy, in its release on Thursday, added to its list of risks one it had not named in July: “the availability of financing for data center developments.”Bloom’s New RisksBloom’s July list already included a slowdown in the adoption of AI. Thursday’s also adds air-permitting delays “which affect the ability to finance the use of Energy Servers for customers.” Western Digital lists among its risks the “concentration of revenue in the company’s Cloud end market and among the company’s top customers.”

Western Digital’s revenue rose 55 percent from a year earlier, to $4.38 billion, in the first quarter of its 2027 fiscal year, which ended Oct. 2, and it forecast a rise of 66 to 72 percent from a year earlier in its fiscal second quarter. Results were “exceeding expectations, driven by robust customer demand and disciplined execution,” Irving Tan, the chief executive, said in the release. Its shares closed at $354.19, down 6.43 percent, before the report; in Yahoo Finance’s five-minute after-hours data, the bar timestamped 7:55 p.m. ended at $331.01.

Bloom, whose fuel cells generate electricity at the customer’s site, reported record third-quarter revenue of $1.24 billion, up 138.1 percent from a year earlier, and raised its forecast for 2026 revenue to $4.4 billion to $4.6 billion, from $3.9 billion to $4.2 billion in July, “for the third time this year,” Simon Edwards, the finance chief, said. On the call, KR Sridhar, the chief executive, said demand for on-site power was “coming from various other pools, other than just data centers being told to bring their own power,” according to a transcript published by The Motley Fool. Bloom’s operations used $27.1 million of cash in the quarter as its inventory and the sums owed to it rose. Its shares closed at $217.77, down 8.70 percent, before the report, and were at $202.84 in the same after-hours data at 7:55 p.m.

Comfort Systems USA, a Houston contractor that installs heating, cooling and electrical systems, ended September with a backlog of $17.81 billion, against $9.38 billion a year earlier.BacklogComfort Systems counts as backlog the revenue still to be recognized on contracted or committed project work. It expects to recognize about 65 to 75 percent of the $17.81 billion over the next 12 months, its quarterly report says. Its quarterly report says demand “has been especially strong in the technology sector, particularly for data centers”; technology customers brought in 60.8 percent of its third-quarter revenue, against 45.8 percent a year earlier. Third-quarter revenue rose 53.7 percent from a year earlier, to $3.77 billion. It also said Bill George, its finance chief since 2005, would retire after it files its 2026 annual report. Its shares closed at $1,279.37, down 8.70 percent, before the report, and were at $1,203.68 in the same data at 7:55 p.m.

TTM, a maker of printed circuit boards in Santa Ana, Calif., reported before the market opened: record sales of $1.2 billion in its third quarter, which ended Sept. 28, up 60 percent from a year earlier, and new orders 2.13 times its sales. Its first forecast for 2027 is sales of $6.5 billion to $6.75 billion, against the $4.47 billion to $4.49 billion it expects this year. On Oct. 19 it announced a plan to buy the Ophir Optics business of MKS for $650 million in cash, to be paid partly with borrowings. “Our cash flow from operations continues to be solid which gives us confidence that we can comfortably handle the leverage from recent acquisitions and capital investments,” Edwin Roks, the chief executive, said. Its shares closed at $73.89.

Nokia said its third-quarter sales to AI and cloud customers rose 123 percent from a year earlier, and its orders from them 118 percent. It kept its operating-profit outlook for the year but lowered its assumption for how much of that profit becomes free cash flow, and now plans to put an additional €400 million into working capital this year “to secure supply and support the growth opportunity in 2027.” Its American depositary shares closed at $7.88.

The reports also show what the suppliers have at stake: Bloom, Nokia and TTM are spending now, on inventory, supply and acquisitions, for sales they expect later. Comfort Systems’ backlog is work it has contracted to do but has not yet done.

The next test comes on Friday at 10 a.m. Central time, when Comfort Systems holds its call with analysts; GE Vernova, the gas-turbine maker, reports on Oct. 28, as do Microsoft and Alphabet, and Amazon reports on Oct. 29. Seagate, which competes with Western Digital in hard drives, is expected to report on Oct. 27, according to Nasdaq’s calendar.