A challenging week for technology shares may reflect waning investor trust in artificial intelligence.
According to The Wall Street Journal, the Nasdaq Composite Index dropped by 3%, marking its steepest weekly decline since President Donald Trump unveiled his comprehensive tariff policy in April.
Some of this year’s top-performing tech firms suffered significant losses, with Palantir’s shares tumbling 11%, Oracle sliding 9%, and Nvidia dropping 7%. These declines followed earnings releases where Meta and Microsoft both signaled ongoing substantial investments in AI—shares of both companies slipped around 4%.
“Valuations are elevated,” Jack Ablin of Cresset Capital commented to the WSJ. “Even minor negative developments tend to be magnified … while positive news fails to have much impact since expectations are already so high.”
Broader economic issues, such as the persistent government shutdown, falling consumer confidence, and widespread job cuts, are also likely weighing on the market. However, the S&P 500 and Dow Jones Industrial Average, which have less exposure to tech, experienced smaller losses of 1.6% and 1.2%, respectively.
