A rough week for tech stocks could signal a loss of investor confidence in artificial intelligence.
The Wall Street Journal reported That Nasdaq composite index fell 3% — making it the worst week since President Donald Trump announced his sweeping tariff plan in April.
Street losing faith in AI
Tech companies that have otherwise performed well this year were the hardest hit, with Palantir’s stock price down 11% this week, Oracle down 9%, and Nvidia losing 7%. These drops also come after earnings reports where meta and Microsoft indicated that they plan to continue spending heavily on AI (both companies were down about 4%).
“Valuations are stretched,” Jack Ablin of Cressett Capital told the WSJ. “Just the slightest bit of bad news gets exaggerated … and the good news isn’t enough to move the needle because expectations are already so high.”
Street losing faith in AI
Economic factors such as ongoing government shutdowns, declining consumer sentiment and massive layoffs are also likely to be dragging down the stock market. But the less tech-heavy S&P 500 and Dow Jones Industrial Average didn’t fare as badly, with declines of 1.6% and 1.2%, respectively.