Tech stocks sound an uncomfortable 2008 echo
XLK•Technology stocks make up 40% of the S&P 500, and a sharp sell-off on AI fears has revived comparisons with past booms and busts. The Nasdaq fell 2.6% on October 22, while Meta Platforms dropped 7%, AMD fell 8% and Micron declined 6%.
1. Echoes of past cycles
Technology stocks now account for 40% of the S&P 500. A sharp sell-off on AI fears has recalled periods when similar market concentration marked booms and busts. Unlike the dotcom era, the article says, frenzied activity is lifting earnings faster than valuations, while the financial crisis shows that this can pose a bigger risk.
2. Tech shares fall
The Nasdaq Composite fell 2.6% on October 22, its biggest one-day decline since June. Meta Platforms fell 7%, AMD declined 8% and Micron fell 6%.
