More than $1 trillion in market value vanished from stock markets over the week as US technology shares plunged, NBC News reported.
In Friday afternoon trading the Nasdaq 100 fell 3.4 percent, the largest one-day drop since mid-June. The broader S&P 500 index fell 1.8 percent, while the technology sector within the index dropped about 4.2 percent, the weakest-performing sector that day.
According to NBC, the sell-off reflects growing investor skepticism about whether the hundreds of billions of dollars that tech giants are spending on artificial intelligence (AI) development and on the data centers that support the technology will ultimately generate adequate returns. Quarterly results have also shown pressure on profits, and in some cases AI initiatives have begun to weigh on revenue from other business lines.
The report notes that earlier, on Thursday, shares of Amazon and Google’s parent company Alphabet Inc. closed lower; Alphabet’s stock fell so sharply that the company lost roughly $500 billion in market value. Those moves followed quarterly reports that highlighted astronomical AI-related expenditures alongside weaker profits.
Chipmaker Intel Corporation endured a particularly rough week. Its shares plunged 29 percent in a single day — the largest one-day drop for the company going back to the 1980s — after its report indicated that revenue and profit could fall short of investor expectations in the fourth quarter.
Several of Intel’s major competitors also declined: SanDisk fell 13 percent, while shares of Advanced Micro Devices (AMD), ARM Holdings, Qualcomm and Marvell each dropped by about 10 percent.
Overall, the market moves underline that until investors see clearer signs of returns from large-scale AI investments, the technology sector may continue to experience heightened volatility.
