{"id":78886,"date":"2025-08-19T23:47:07","date_gmt":"2025-08-19T23:47:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/78886\/"},"modified":"2025-08-19T23:47:07","modified_gmt":"2025-08-19T23:47:07","slug":"us-tech-stocks-hit-by-concerns-over-future-of-ai-boom","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/78886\/","title":{"rendered":"US tech stocks hit by concerns over future of AI boom"},"content":{"rendered":"

Stay informed with free updates<\/p>\n

Simply sign up to the US equities myFT Digest — delivered directly to your inbox.<\/p>\n

US tech stocks sold off on Tuesday as a wave of concerns that intense enthusiasm surrounding artificial intelligence could be overdone slammed into some of Wall Street\u2019s most speculative companies.<\/p>\n

Nvidia, the chips group that has surged to become the world\u2019s first $4tn company on the back of AI<\/a>, fell 3.5 per cent, while software group Palantir dropped 9.4 per cent and chip designer Arm shed 5 per cent.<\/p>\n

The tech-heavy Nasdaq Composite closed down 1.4 per cent, the biggest one-day drop for the index since August 1. The blue-chip S&P 500<\/a> closed 0.7 per cent lower.<\/p>\n

Traders pinned some of the decline on a critical report on Monday authored by a branch of the Massachusetts Institute of Technology. <\/p>\n

Researchers said \u201c95 per cent of organisations are getting zero return\u201d from their investments in generative AI, the technology that has sent US stocks soaring to record highs in recent months. <\/p>\n

\u201cThe story is spooking people,\u201d said one trader close to a multibillion-dollar US tech fund.<\/p>\n

\u201cJust 5 per cent of integrated AI pilots are extracting millions in value, while the vast majority remain stuck with no measurable [profit and loss] impact,\u201d the MIT report said. <\/p>\n

The stock drop also came days after OpenAI<\/a> chief executive Sam Altman signalled an AI bubble might be forming. \u201cAre investors over excited? My opinion is yes,\u201d Altman said late last week. <\/p>\n

He said: \u201cI do think some investors are likely to lose a lot of money, and I don\u2019t want to minimise that, that sucks. There will be periods of irrational exuberance. But on the whole the value for society will be huge.\u201d <\/p>\n

The fresh jolt of tech jitters comes about seven months after Chinese AI group DeepSeek sparked a brief bout of market tumult<\/a> when it said it made advances apparently achieved with far less computing power than US rivals.<\/p>\n

\"Line<\/p>\n

Tuesday\u2019s declines were driven by drops for some of this year\u2019s best performing stocks. Oracle and Advanced Micro Devices, two of the five top-performing large-cap stocks since mid-May, fell 5.9 per cent and 5.4 per cent, respectively. AppLovin, which serves up advertisements within apps, lost 5.9 per cent.<\/p>\n

Bitcoin shed 2.7 per cent, driving falls in stocks linked to the cryptocurrency such as Strategy and Metaplanet.<\/p>\n

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\u201cThe market has been on fire \u2014 and today you saw a rotation out of a lot of the very hot, high-momentum names,\u201d said Jacob Sonnenberg, a portfolio manager at Irving Investors with a focus on tech.<\/p>\n

DeepSeek\u2019s announcement in January that surprised the market about a high-performing new model raised question about American companies\u2019 dominance of AI and the level of demand for their chips. Although stocks recovered, the episode underscored investors sensitivity to bad news about the technology. <\/p>\n

Defensive parts of the market including consumer staples, utilities and real estate rose as tech slipped. About seven in 10 S&P 500 stocks ended the session higher.<\/p>\n

Tech has driven<\/a> the market\u2019s recent run higher. The S&P 500 information and technology sub-index has risen 14 per cent since mid-May, led by AI-linked companies such as Oracle and AMD.<\/p>\n

Additional reporting by George Hammond in San Francisco <\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the US equities myFT Digest — delivered directly to…\n","protected":false},"author":2,"featured_media":78887,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,733,4308,86,56,54,55],"class_list":["post-78886","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-technology","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/78886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=78886"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/78886\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/78887"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=78886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=78886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=78886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}