Nasdaq Suffers Biggest Drop Since June on AI Spending Worries

ME AI News, October 23 — U.S. tech stocks plunged as investors grew increasingly worried that soaring artificial intelligence spending is unsustainable. The Nasdaq dropped 2.6% on Thursday, its largest single-day decline since June. The Dow Jones Industrial Average, weighted toward blue chips, edged up 0.02%. Unease over the scale of Big Tech AI investments dragged down several major AI-linked stocks. Meta (META.O) fell 7% after disclosing further heavy spending commitments down the road. Revenue rose substantially, yet profit still fell short of Wall Street expectations. "It all traces back to Meta," said investor and analyst Navellier. "The issue now is that the market is selling indiscriminately, throwing out the good with the bad." Comments from the CEO of NVIDIA deepened market worries: AI does not have enough capital to support the growth of so-called "neoclouds," companies that mainly provide digital infrastructure for large AI cloud providers such as Meta and Amazon. SpaceX, NVIDIA and CoreWeave all declined, and the Philadelphia Semiconductor Index plunged 6.7%. With the AI sector still swinging violently this week, U.S. investors are moving into bonds and away from riskier assets such as tech stocks. That shift has driven Treasury yields sharply lower. (Source: MLion)