For more than two years, shares of companies tied to artificial intelligence have powered much of Wall Street's gains. This week offered a reminder of how quickly that can work in reverse.
The clearest example was Micron Technology, a major maker of memory chips used in AI data centers. Its shares plunged 17 percent on Thursday as part of the broader technology selloff, before rebounding 5 percent on Friday as buyers stepped back in. Cryptocurrencies moved in step with the AI trade rather than against it: bitcoin fell alongside the tech-stock rout, underscoring how closely digital-asset prices have become linked to the same risk appetite driving AI-related equities, rather than acting as a separate, uncorrelated asset the way some investors once expected.
The scale of Thursday's move was unusual. The Nasdaq 100, which is heavily weighted toward large technology and AI-linked companies, fell 6.3 percent in a single session, its worst day since the market turmoil of the pandemic, erasing an estimated $2.3 trillion in value. Commentary across trading desks framed the move as a test of whether the broader AI trade that has driven markets higher since 2023 is entering a more volatile phase, in which investors demand clearer evidence that massive AI infrastructure spending is translating into profits, rather than rewarding the buildout itself.
Friday's partial recovery suggests investors are not abandoning the theme altogether. A stronger-than-expected October jobs report helped calm nerves about the broader economy, and buyers returned to some of the week's hardest-hit names. But the swings have been sharp enough that strategists are now debating whether this was a single rough week or the start of a longer reassessment of how richly AI-exposed stocks should be valued.
Upcoming earnings from major chipmakers and cloud-computing providers will be watched closely for signs of whether AI-related spending is holding up, which could determine whether this week's selloff proves temporary.
What triggered the technology selloff?
A broad wave of selling hit companies tied to the artificial-intelligence buildout, including chipmakers, as investors reassessed how richly those stocks should be valued.
Did cryptocurrency prices hold up better than tech stocks?
No, bitcoin fell alongside the AI-driven stock rout rather than acting as a separate, uncorrelated asset.