Friday turned out to be nothing short of a nightmare for technology companies in the US stock market. The sudden and massive decline in the shares of leading tech companies has sent shockwaves among investors worldwide. 6 percent in a single session. Not just Intel, but companies like Nvidia, AMD, Dell, and HP also witnessed heavy selling pressure, while this widespread downturn has created panic in the market, raising serious questions about whether the artificial intelligence bubble has begun to burst in the United States.
Nasdaq suffers its largest single day drop since June 5
The stampede in tech stocks directly impacted major US indices. 86 percent or 747 points to close at 25,437. In percentage terms, this marks Nasdaq's largest single-day drop since June 5.8 percent. 82 percent to settle at 7,580.09 percent or 572 points, closing at 51,770. Throughout the month of October, the returns for both Nasdaq and the S&P 500 remained negative, while the Dow Jones registered a marginal gain. According to Reuters, the market value of the Nasdaq 100 alone eroded by more than 2 trillion dollars in the month of October.
Havoc in stocks ranging from Nvidia to Dell
The primary catalysts behind Friday's market tsunami were the dismal quarterly results reported by Intel and Amazon, while these earnings reports dragged down the entire semiconductor industry as well as the server sector. 2 percent. Another major chip firm, AMD, experienced a steep decline of nearly 11 percent. 6 percent drop. The fallout from this sell-off will clearly reflect across global markets on Monday, November 3. Stock markets in South Korea and Taiwan, in particular, could face severe downturns since their recent rallies rely heavily on technology stocks.
Companies burdened by debt and growing questions on returns
The weak financial results from Intel and Amazon have cast severe doubts on the market rally fueled by artificial intelligence, while investors are now directly questioning the timeline and viability of returns on the massive capital poured into AI by technology firms. Over the past few years, American tech and semiconductor companies have raised substantial funds through debt. Meta, Amazon, and Alphabet have issued billions of dollars in bonds over the last four years. 5 billion dollars in funding, while Microsoft is also contemplating raising about 25 billion dollars through bonds. Morgan Stanley estimates that investments in AI infrastructure will surpass 1 trillion dollars next year. This mounting debt burden on corporations has severely troubled investors worldwide.