US technology shares slid on Tuesday in New York trading as fresh doubts about the boom in artificial intelligence rippled through 2025’s biggest winners, pushing the Nasdaq Composite to its sharpest one-day fall since August 1 and dragging broader equities lower.
Nvidia, the chip maker that recently became the first company with a $4 trillion valuation as reported by Cryptopolitan earlier, fell by 3.5% in stock valuation.
Palantir, a major software company, dipped by 9.4% whereas Arm, a growing chip designer, lost 5% in stock valuation. At the same time, the tech-focused Nasdaq Composite edged lower by 1.4%. At the same time, S&P 500 slipped by 0.7%.
Stock selling spilled into Asia on Wednesday. Nikkei 225 in Japan fell by 1.8% while Kospi in South Korea fell lower by 1.9%. The Hang Seng index in Hong Kong also suffered, as it shed 0.6%, mirroring weakness on Wall Street.
Traders pointed to a critical assessment published Monday by MIT’s affiliate as one reason for the pullback. The researchers mentioned “95 per cent of organizations are getting zero return” from their spending on gen AI, the tech that helped propel US stocks to record levels.
The latest bout of concern arrives after 7 months since China’s DeepSeek rattled markets by claiming AI advancement with significantly lesser computing power as compared to rivals from the US. While shares later steadied, the episode highlighted how sensitive investors remain to negative headlines.
Declines were led by several of the year’s top performers
Advanced Micro Devices and Oracle, both among five best large-cap gainers since May, shed 5.9% and 5.4%, respectively. AppLovin, on the other hand, which serves adverts in applications, lost 5.9%.
In the crypto markets, Bitcoin reduced by 2.7%, weighing on stocks linked with the broader crypto market including Metaplanet and Strategy.
“The market has been on fire, and today you saw a rotation out of a lot of the very hot, high-momentum names,” said Jacob Sonnenberg, a portfolio manager at Irving Investors who focuses on tech.
A January announcement by DeepSeek related to a high-performing new model raised questions about whether American companies can maintain their lead in AI and about the level of demand for the chips that power the systems. Although shares later recovered, the episode showed how quickly sentiment can swing.
As big tech fell, defensive groups such as utilities, real estate, and consumer staples rose. Roughly 7 out of 10 S&P 500 stocks finished higher.
Even with the setback, tech has been the engine of the market’s latest climb. The S&P 500 information technology sub-index has gained 14 per cent since mid-May, led by AI-linked names including Oracle and AMD.
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Source: https://www.cryptopolitan.com/tech-stocks-tumble-ai-doubts/
