The AI trade that powered US tech stocks to record highs is hitting a wall. The Nasdaq Composite dropped approximately 2.2% as investors began asking a question that had been conspicuously absent during the sector’s euphoric run: what exactly are we getting for all this money?
The S&P 500 followed with a 1.4% decline, dragged lower by the same megacap names that had been carrying it higher for months. Seven companies account for roughly 30% of the S&P 500’s total market value, which means when AI sentiment turns, the broader market feels it immediately.
The numbers behind the nervousness
This wasn’t a flash crash or a one-day anomaly. It was the second major leg down in recent weeks, following a roughly 4.2% Nasdaq drop on June 5 driven by similar cooling enthusiasm around AI.
The damage was concentrated in the names you’d expect. Micron, Broadcom, Arm, Marvell, and Nvidia were among the hardest-hit stocks. These companies sit at the center of the AI infrastructure buildout, manufacturing the chips and networking equipment that power the data centers behind every large language model and AI application.
