- Selloff in US tech stocks wiped about $1.2 trillion amid AI spending and earnings concerns
- Nasdaq 100 declined four sessions, Tesla fell over 16%, others dropped 7%-10%
- Nvidia shares fell 5%, Apple reclaimed title as most valuable company by market cap
The selloff in U.S. technology stocks stretched into a fourth straight trading session, wiping about $1.2 trillion from the sector's market value as investors questioned rising artificial intelligence spending, weaker-than-expected earnings and higher capital expenditure plans from some of the world's biggest companies.
The tech-heavy Nasdaq 100 extended its decline, with Tesla leading losses after tumbling more than 16% over the past four trading sessions. Sandisk, T-Mobile, Meta Platforms, Alphabet and Amazon fell between 7% and 10% over the same period.
The broad decline also pushed Nvidia lower, allowing Apple to reclaim the title of the world's most valuable listed company for the first time since April 2025. Investors are now focused on earnings from major technology companies, with spending plans from firms such as Meta and Amazon expected to determine the sector's next move.
Nvidia Slips
Nvidia shares fell 5% on Monday, reducing the chipmaker's market value to $4.77 trillion. The decline came as AI chip stocks weakened amid concerns over the growing cost of building AI infrastructure. The fall enabled Apple to finish the session ahead of Nvidia by market capitalisation.
Nvidia had been the world's most valuable company since June 2025 after overtaking Microsoft. It also briefly crossed a $5 trillion market capitalisation in October.
So far this year, Nvidia shares have gained 4%, while Apple has advanced 24%. Investors have favoured Apple's approach of limiting capital expenditure on AI infrastructure by renting computing capacity instead of building large-scale facilities.
Although Nvidia remains in its third year of AI-led sales growth, investor interest has broadened beyond graphics processing units to memory chips and other data centre infrastructure. Companies such as Micron Technology, SK Hynix and Sandisk have also benefited from that shift.
Earnings Pressure
The latest selloff gathered pace after disappointing results from Alphabet and Tesla.
Alphabet shares dropped 7% on Thursday after the company raised its full-year capital expenditure guidance to more than $200 billion. Tesla fell nearly 15% after reporting profit that missed expectations and warning that operating expenses would increase.
The weakness reflects growing investor concern over rising AI investment, softer quarterly earnings and increasing spending commitments across the technology sector.
The market reaction comes ahead of a key week of earnings from major global technology companies. Investors are expected to scrutinise spending plans from Meta Platforms and Amazon, which could shape the direction of technology shares in the coming weeks.
According to Bloomberg estimates, Alphabet, Microsoft, Amazon and Meta are expected to spend about $724 billion on capital expenditure this year and nearly $950 billion in 2027.
Apple also faces challenges despite outperforming its peers. Strong demand for memory chips used in AI computing has pushed up the company's costs, prompting higher prices for products such as MacBooks and iPads. Investors are watching whether those increases will affect demand and profit margins.
The rapid expansion of AI infrastructure is also reshaping business models across the technology sector. Alphabet's cash flow turned negative in the second quarter despite the company's large revenue base, highlighting investor concerns over the financial impact of rising AI investment, according to Bloomberg.
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