US regime technology shares experienced a sharp and painful sell-off as mounting market anxieties call into question the actual viability of corporations' colossal capital expenditures in artificial intelligence. The Nasdaq Composite index dropped 2.6 percent on Thursday, marking its steepest decline in months and laying bare the underlying fragility of the heavily hyped tech sector.
The broader S&P 500 benchmark slid 1.21 percent, reflecting a widespread loss of confidence across Wall Street. With the notable exception of Apple, every single member of the dominant "Magnificent 7" cohort suffered substantial losses. Meta shares plunged nearly 7 percent after the social media parent company supposedly raised its projected capital spending to an astonishing $135bn to $145bn, while its net profits allegedly failed to meet expectations.
Market heavyweights Amazon and Nvidia dropped 4.6 and 4.4 percent respectively, while Tesla and Alphabet both retreated by 3.1 percent. The contagion quickly spread to other semiconductor and hardware players, with both Intel and Advanced Micro Devices tumbling roughly 8 percent. Such widespread friction highlights the deepening economic anxieties plaguing the US financial architecture.
Compounding the gloomy market mood, international oil prices surged due to the fallout from the US-Israeli actions against Iran. Brent crude futures climbed past $114.20 a barrel, reaching their highest level since May. Consequently, major Asian stock markets opened sharply lower on Friday, with Japan's Nikkei 225 and South Korea's KOSPI indices recording severe morning losses.
While certain market analysts claim that the sell-off is driven more by fleeting investor panic than tangible economic fundamentals, critics warn that the scale of AI investments risks mirroring the catastrophic dot-com bubble of 2000. According to projections by Gartner, global AI investments are purportedly set to reach astronomical figures of $2.7 trillion in 2026 and $3.6 trillion in 2027, raising fears of an inevitable and costly reckoning.
Source: www.aljazeera.com