New York, July 28: US technology stocks witnessed a sharp decline as investor concerns over rising artificial intelligence (AI) spending triggered a major market selloff, wiping out nearly $1.2 trillion in market value and raising questions over the pace of returns from massive AI investments.
The decline was led by major technology and semiconductor companies, as investors reassessed the sustainability of the sector’s AI-driven rally. Concerns have intensified over the billions of dollars being committed towards AI infrastructure, including advanced processors, data centres, and cloud computing capabilities.
Market analysts said the selloff reflects growing caution among investors who are seeking clearer evidence that heavy AI investments will translate into stronger earnings and long-term profitability. While artificial intelligence remains a key growth opportunity, concerns over rising costs and delayed monetisation have prompted a reassessment of technology valuations.
The weakness in technology shares weighed on broader US markets, with the Nasdaq Composite coming under pressure, while the S&P 500 remained largely unchanged and the Dow Jones Industrial Average posted modest gains as investors rotated towards other sectors.
The impact of the tech downturn extended beyond Wall Street, with global semiconductor stocks facing renewed pressure and Asian markets opening lower amid concerns over the outlook for technology companies.
Analysts said upcoming earnings reports and corporate commentary will be closely watched for indications on AI investment strategies, spending discipline, and the expected timeline for generating returns from these large-scale projects.
Despite the recent volatility, market experts said AI remains a significant long-term technology trend. However, investors are increasingly focusing on profitability, efficiency, and measurable business outcomes as companies continue to expand their AI capabilities.
