US tech stocks tumble as investors fret over AI spending
Summary
US technology stocks fell sharply due to worries about the large amounts of money these companies are spending on artificial intelligence (AI). Major indexes like the Nasdaq and S&P 500 dropped, with many top tech companies reporting losses or slowing profits.Key Facts
- The Nasdaq Composite fell 2.6 percent, its biggest drop since early June.
- The S&P 500 dropped 1.21 percent, its largest fall since late July.
- Most of the top seven tech companies, known as the "Magnificent 7," lost value except Apple, which rose 1.2 percent.
- Meta raised its AI spending forecast to $135 billion-$145 billion but reported lower-than-expected profits.
- Other major tech firms including Amazon, Nvidia, Tesla, Alphabet, Microsoft, Intel, and AMD also saw significant stock drops.
- Rising oil prices, partly due to tensions involving the US, Israel, and Iran, added to market concerns.
- Asian markets opened lower following the US tech stock declines.
- Experts say the market drop is driven more by investors’ fears than changes in the companies’ actual performance.
- Global investment in AI is expected to reach $2.7 trillion by 2026 and $3.6 trillion by 2027.
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