A wave of selling hit major technology shares on June 23, with investors growing nervous about how much money companies are pouring into artificial intelligence. The BBC reported that tech stocks tumbled on concerns over AI spending, while Axios framed the move as "AI bubble fears" sending stocks plunging.
The damage was broad. According to Yahoo Finance, the Nasdaq Composite was down 1.2% as of 10 a.m., with the S&P 500 also lower, amid worries about the long-term valuations of AI companies. The Economic Times reported that AI spending fears hammered US tech giants, with Alphabet leading the selloff.
Chipmakers were hit hard. Investor's Business Daily noted that Nvidia, a Dow Jones component and one of the biggest names in AI, dived below a key technical level. A separate Yahoo Finance item described AMD and Intel falling 5% and Nvidia slipping 3% in a Korean-led chip selloff that some bulls characterized as "healthy." Palantir, according to foreignpolicyjournal.com, sank to a 52-week low as the software sector faced pressure from both interest rates and AI concerns.
Not everything fell. StartupHub.ai reported that Super Micro surged 16% and the SOXX semiconductor index rose 2.4%, even as Alphabet and Palantir declined — a sign of investors rotating between AI-related names rather than abandoning the sector wholesale. The same report pointed to chip-equipment makers diverging from the big cloud "hyperscaler" customers.
The core question driving the drop, the sources suggest, is whether the enormous sums being spent on AI infrastructure can be justified by future returns — and whether current stock valuations have run too far ahead of reality.
Why it matters: Because a handful of AI-linked giants now drive much of the market's value, doubts about their spending can ripple quickly into the broader indexes that hold ordinary investors' retirement savings.