US technology stocks fell sharply as investors questioned the high costs of artificial intelligence investments. Asian markets also trended lower.
Major United States technology stocks recently experienced a significant drop. Investors now worry about the long-term sustainability of massive artificial intelligence spending.
The Nasdaq Composite index fell by 2.6 percent on Thursday. This marks the biggest decline for the index since early June.
Also, the S&P 500 index decreased by 1.21 percent. This drop represents the largest single-day loss for the benchmark since late July.
Most of the "Magnificent 7" tech companies reported heavy losses. For example, Meta shares fell nearly 7 percent after the company increased its spending budget.
Next, Amazon and Nvidia saw their stock values drop by 4.6 percent and 4.4 percent respectively. Microsoft, Tesla, and Alphabet also faced declines.
However, Apple stock bucked the trend by rising 1.2 percent. Other companies like Intel and Advanced Micro Devices fell by roughly 8 percent.
Meanwhile, rising oil prices contributed to the negative mood in the markets. Brent crude prices climbed above $114 per barrel on Friday.
As a result, stock markets across Asia opened lower following the poor performance on Wall Street. Japan and South Korea saw particularly sharp declines.
Still, some analysts believe market sentiment drives these swings rather than actual business problems. Expert Jay Goldberg suggests investors are simply feeling fearful right now.
Finally, experts continue to debate the potential for an AI market bubble. Some fear a crash similar to the dot-com era of 2000.
Others argue that AI technology will change society enough to justify these high costs. Reports indicate global AI investment could reach trillions of dollars soon.