The entire US stock market looked like a house of Halloween horrors on Friday, driven by rapidly sinking tech stocks tied to the swelling AI bubble.
The tech-heavy Nasdaq 100 — home of major AI stocks like Apple, Nvidia, Microsoft Corp and Amazon — was down 2.6 percent at the time of writing, well on track for a $1 trillion drop, as NBC News observed.
Losses were pushed by Amazon, which shed about two percent when trading opened Friday morning. Though Amazon’s third quarter earnings report pointed to continued momentum in the company’s cloud computing unit, it wasn’t enough to offset deep-seated fears around the AI bubble. In particular, Amazon’s capital expenditures for 2026 ballooned to $220 billion, much of which is tied to AI.
Friday’s rout comes after shares for Google’s parent company Alphabet — a major bellwether for the AI trade — plummeted over 12.6 percent on Thursday. It was the company’s worst single trading day ever, and the second-largest single day wipeout of any company’s stock in history, obliterating over $500 billion worth of market value.
The motion is all stoking fears of a bursting AI bubble, as trillions of dollars remain tied up in just a few top AI companies, which have largely struggled to turn the tech into a commercially viable technology. Many are now asking whether this hyperscale approach — in which tech monopolies build massive, energy-intensive data centers to fuel AI demand — is a sustainable approach, compared to one which deploys efficient and lightweight models for a fraction of the cost.
As for whether this is the end of the AI feeding frenzy, it may be too early to tell. For many investors at this point, the hyperscale approach simply has to work, as former federal consumer protection regulator Rohit Chopra told Politico in a recent interview.
“Many in the market feel we have no choice but for it to work out,” Chopra explained. “But at some point, we will see whether those hypotheses about revenue and growth come together. And if they don’t, that’s where you start seeing a pretty significant ripple effect across the economy.”
More on AI: It Appears That the AI Bubble Has Just Burst in China
The post Stock Market Bloodbath Spikes Fears of AI Bubble Bursting appeared first on Futurism.
