The technology sector has experienced its third formal correction of 2026 as mounting capital expenditures on artificial intelligence trigger widespread skepticism over return timelines. The downturn gained momentum following weak quarterly reports from prominent industry leaders, including Meta Platforms Inc. and Amazon.com Inc. Alphabet Inc. notably suffered its steepest single-day drop on record due to lagging advertising and search revenues. The retreat has extended beyond internet platforms to hit enterprise software and semiconductor firms facing disappointing demand forecasts.
Key points
Growing investor anxiety over hundreds of billions spent on the artificial intelligence b…: Growing investor anxiety over hundreds of billions spent on the artificial intelligence buildout is driving tech volatility.
Despite sliding into its third technical correction of the year, the index retains an 11%…: Despite sliding into its third technical correction of the year, the index retains an 11% overall gain for 2026.
Massive corporate expenditure without a clear timeline for returns has left many artifici…: Massive corporate expenditure without a clear timeline for returns has left many artificial intelligence stocks looking overextended.
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(Bloomberg) -- The Nasdaq 100 Index tumbled into a correction on Monday as investors turn increasingly pessimistic about Big Tech and the artificial intelligence trade.
The tech-heavy index fell 1.4% to 27,989.82, putting it down more than 10% from an Oct. 6 peak to meet the technical threshold for a correction. While the index remains up 11% for 2026, this marks its third correction of the year as trading whipsaws with investors seemingly changing their minds on AI by the day.
The current selloff comes as Wall Street grows concerned about the cost of the AI buildout and when the hundreds of billions of dollars being spent will show clear signs of a payoff. Alphabet Inc.’s stock had its worst day ever last week after the company reported weaker-than-expected revenue for advertising and search. Meta Platforms Inc. and Amazon.com Inc. also slumped in the wake of their recent results.
“People are getting antsy about how much these companies are spending, spending, spending,” said Brian Culpepper, portfolio manager at James Investment Research. “I don’t think the AI trade is dead, but…
Growing anxieties surrounding the artificial intelligence sector are placing sustained downward pressure on major technology equities. This latest downturn represents an ongoing decline that initially took hold in October, leaving market participants to evaluate whether broader structural drops are imminent.
Overseas capital ownership in domestic equities has dropped to its lowest point in over a decade despite recent net inflows. Global headwinds such as elevated US bond yields, a resilient dollar, and local valuation concerns continue to weigh on international allocations. Meanwhile, a massive surge in institutional domestic investments has steadily counterbalanced this withdrawal and absorbed market supply.
Blockchain data reveals that perpetrators of the massive October 29 cyberattack conceded roughly $119 million via unfavorable slippage during their escape attempts. Market participants capable of navigating frozen exchange rails exploited dramatic cross-venue discrepancies caused by the attackers' desperate buying. This rapid capital flight warped decentralized liquidity pools before centralized authorities managed to halt the illicit token flows.