Tech stocks plunge as fears of an AI bubble grow

A sharp selloff

AI-linked tech stocks fell sharply on Friday. The tech-heavy Nasdaq 100, home to Apple, NVIDIA, Microsoft and Amazon, was down 2.6 percent at the time of writing and on track for a $1 trillion drop.

Amazon and Alphabet weigh in

Amazon was a major drag, shedding about 2 percent at Friday's open. Its cloud unit kept momentum, but 2026 capital expenditures ballooning to $220 billion, much of it tied to AI, deepened concerns about spending.

On Thursday, Alphabet shares plunged more than 12.6 percent, the company's worst single trading day ever, wiping out over $500 billion in market value.

The bubble debate

With trillions of dollars concentrated in a few top AI companies that have struggled to make the technology commercially viable, fears of a bursting bubble are mounting. At the center is whether the hyperscale approach — massive, energy-intensive data centers — is sustainable compared with lighter, more efficient models.

Former consumer protection regulator Rohit Chopra said many in the market feel there is no choice but for it to work out. He warned that revenue and growth assumptions will eventually be tested, and if they fail, the ripple effect across the economy could be significant.