US tech sector loses $1 trillion in 1 week
The US tech sector just lost a massive $1 trillion in market value in one week, mostly because investors are starting to question if all the hype (and spending) on artificial intelligence is really going to pay off.
Big names like NVIDIA, Oracle, Meta, and Palantir all saw their stock prices slide.
Microsoft took the biggest hit
If you're following tech or thinking about investing, this is a wake-up call.
Microsoft took the biggest hit—its shares dropped 8.6%, wiping out $350 billion in value, the worst since 2011.
Even Palantir saw a decline despite its earnings report, showing that investors aren't convinced AI will deliver profits anytime soon.
Investors are worried about AI spending frenzy
People are worried we might be in an AI spending frenzy, with companies spending billions (Microsoft alone spent nearly $35 billion in expenditures last quarter) but not seeing clear returns yet.
Add stubborn inflation over 3%, higher interest rates, and October's record job cuts—the most in 22 years—and it's no surprise confidence is shaky.
Consumer sentiment is currently hitting some of its lowest numbers in the history of the survey, making everyone rethink how soon AI will actually pay off.