A rough week for tech stocks may signal a loss of investor confidence in artificial intelligence. The Wall Street Journal reports that the Nasdaq Composite Index was down three percent, marking its worst week since a sweeping tariff plan was announced in April.
Technology companies that have otherwise performed well this year were among the hardest hit. Palantir’s stock price fell eleven percent this week, Oracle declined by nine percent, and Nvidia lost seven percent. These drops follow earnings reports from Meta and Microsoft, in which both companies indicated plans to continue spending heavily on artificial intelligence. The stocks for both Meta and Microsoft were down about four percent.
According to one analyst, valuations are stretched. He noted that even the slightest bit of bad news gets exaggerated, while good news is not enough to move the needle because expectations are already so high.
Other economic factors are also likely dragging down the stock market, including the ongoing government shutdown, declining consumer sentiment, and widespread layoffs. However, the less tech-heavy S&P 500 and Dow Jones Industrial Average did not perform quite as poorly, declining by 1.6 percent and 1.2 percent respectively.