NEW YORK: More than $2 trillion in market value is at risk on the technology-heavy Nasdaq 100 this month as investors reassess whether massive investments in artificial intelligence will generate returns quickly enough.
The index has fallen more than 5.8 per cent in October, with concerns intensifying after major technology companies raised their spending forecasts for AI infrastructure. Meta, Alphabet and Amazon have announced higher investment plans as they compete to expand their computing capacity and AI services.
Rising borrowing costs have added to investor concerns, particularly as companies increasingly rely on debt to finance large-scale infrastructure projects. Investors are also questioning whether the pace of spending can be sustained without a corresponding increase in revenue.
However, some technology companies have reported growth in cloud services and advertising, indicating that demand for AI-related services is beginning to translate into business gains.
The market uncertainty reflects a wider debate over the scale of investment required to build AI infrastructure and the time companies may need to recover those costs.
With inputs from media reports.