Nasdaq faces $2 trillion wipeout in October as AI spending fears deepen
QQQ•The Nasdaq 100 has fallen more than 5.8% in October, putting more than $2 trillion in market value at risk as investors question whether Big Tech’s rising AI spending will generate returns quickly enough.
1. Nasdaq losses deepen
The Nasdaq 100 has fallen more than 5.8% so far in October, as earnings from major technology companies intensified scrutiny of their AI spending. The potential loss of more than $2 trillion in market value would be slightly larger than SpaceX’s entire market value.
2. Spending and debt concerns
Meta, Alphabet and Amazon raised spending forecasts as they expand AI infrastructure. Meta’s plans for a record $97.5 billion fund raise heightened concerns about shareholder dilution, while rising borrowing costs have raised questions about companies’ growing reliance on debt. Microsoft and SpaceX reported results that showed AI spending starting to pay off.
3. Revenue and investment forecasts
Amazon Web Services continued to accelerate, while Meta reported better-than-expected revenue growth and an upbeat outlook; Microsoft forecast strong cloud growth. Morgan Stanley forecast AI infrastructure spending would exceed $1 trillion next year. J.P. Morgan expects global AI capital expenditure to reach $5.5 trillion by 2030, including $900 billion in 2026.
