The tech sector is having a rough June. The Nasdaq Composite fell more than 4% in a single session, its worst day since April 2025, as investors collectively decided that maybe spending hundreds of billions of dollars on AI infrastructure deserves a second look.
The S&P 500 dropped 2.64% in the same session. And crypto, ever the loyal sidekick to risk-on sentiment, followed tech right off the cliff. Bitcoin is now trading between $62,000 and $67,000, well below its previous highs.
The $650 billion question
Here’s what spooked the market. Microsoft, Nvidia, Oracle, Meta, Amazon, and Alphabet have collectively indicated AI-related capital expenditure plans exceeding $650 billion for 2026. That’s not a typo. Six companies plan to spend more than the GDP of most countries on data centers, chips, and the infrastructure needed to keep large language models humming.
The concern isn’t that AI doesn’t work. It’s that the returns on this level of spending remain stubbornly unclear. When you’re a hyperscaler burning through capital at this pace, investors eventually want to see something beyond impressive demos and vague promises about enterprise adoption.
