Global Tech Stocks Plunge as Investors Question AI Spending Returns
Global technology stocks experienced a sharp sell-off on Tuesday, dragging down the Nasdaq and S&P 500. The decline was led by heavy losses in semiconductor giants like Micron, Intel, and AMD, with the Nasdaq dropping as much as 3%. This downturn was further exacerbated by a rout in South Korean equities and production cuts from SK Hynix, which sent shockwaves through international markets. Market analysts suggest the retreat stems from a shift in investor sentiment, moving from rewarding AI spending to demanding concrete evidence of long-term profitability. Concerns are mounting over massive borrowing costs, with Morgan Stanley projecting AI-related borrowing to exceed half a trillion dollars this year, alongside fears that high spending may not yield expected returns.
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