The declines left the tech-heavy Nasdaq Composite with a weekly loss of 3 per cent, its worst five-day run since the index fell 10 per cent after Trump launched his trade war with a blitz of tariff<\/a> announcements in April.<\/p>\n \u201cAI-related capital expenditures are substantial, increasingly debt-financed, and reminiscent of the 2000 tech bubble\u2019s frenzy of questionable investments,\u201d said Florian Ielpo, head of macro at Lombard Odier Investment Managers.<\/p>\n Four tech groups, Alphabet, Amazon, Meta and Google, last week reported a combined $112bn of capital expenditure in the third quarter. The sector is meanwhile borrowing hundreds of billions<\/a> to fund its expansion in AI. <\/p>\n Amateur traders, who are notorious for buying most market dips, decided to stay on the sidelines this week, according to JPMorgan analysts. <\/p>\n Retail investors trimmed their positions in defence group Palantir following its earnings on Tuesday and took some profits on quantum computing stocks that have also surged this year, the bank said in a note to clients.<\/p>\n Concerns about sky-high valuations for Silicon Valley tech groups have collided this week with signs of weakness in the US labour market and waning consumer confidence in the world\u2019s biggest economy.<\/p>\n The University of Michigan\u2019s index of consumer sentiment fell to a three-year low in November. <\/p>\n The absence of key economic data caused by the longest-ever federal government shutdown<\/a>, now stretching to 38 days, means investors are growing increasingly nervous that the labour market may have weakened substantially since late September.<\/p>\n \u201cPerhaps the risk of a recession is creeping up under our noses,\u201d said Mike Zigmont at Visdom Investment Group.<\/p>\n The Chicago Federal Reserve\u2019s estimated hiring rate fell for the sixth consecutive month in October and investors have been spooked by a recent flurry of lay-offs announced by companies including Amazon, Paramount and Target.<\/p>\n \u201cHiring has been very weak. The [Federal Reserve] is behind the curve and needs to cut rates quicker,\u201d said Stephen Yiu, chief investment officer of investment fund Blue Whale Growth, which has bet big on Nvidia.<\/p>\n \u201cWe don\u2019t own the other members of the Magnificent Seven, I\u2019m very concerned about them burning money to stay competitive,\u201d he added.<\/p>\n Nvidia, the world\u2019s most valuable company, has fallen the most in dollar terms over the week. Its market capitalisation declined by about $350bn, little more than a week since it became the first company ever to hit a $5tn valuation.<\/p>\n Microsoft, Oracle and Broadcom also lost ground during the week, although the market steadied at the end of trading on Friday.<\/p>\n Chief executive Jensen Huang told the Financial Times<\/a> this week that he expected China was ultimately \u201cgoing to win the AI race\u201d against the US. <\/p>\n He subsequently tried to row back on the comments, saying that China was \u201cnanoseconds behind America in AI\u201d. <\/p>\n Huang on Friday signalled it was unlikely Nvidia would be able to sell a version of its latest Blackwell AI processors to Chinese customers. This would be a setback for the Silicon Valley chipmaker after hints from Trump in recent months that he might agree to such a plan.<\/p>\n This week\u2019s debut of Beijing-based Moonshot AI\u2019s Kimi K2 Thinking model, which reportedly cost less than $5mn to train, was hailed as the latest sign that Chinese competitors are narrowing the technical lead held by US developers. <\/p>\n The release of DeepSeek\u2019s low-cost R1 model sparked a Wall Street panic in January that wiped $589bn from Nvidia\u2019s market value in a single day.\u00a0<\/p>\n Recommended<\/p>\n![\"Line](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/11\/https:\/\/d6c748xw2pzm8.cloudfront.net\/prod\/b23f6390-bc11-11f0-ab99-577ad954634a-standard.png\")
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