Sunday, 9 November 2025
Global equity markets ended the week on edge as the world’s most influential technology and artificial-intelligence companies were struck by a wave of selling that wiped out almost $800 billion in market value within days. It marks the sharpest weekly drop for major tech shares since April and signals a clear shift in investor sentiment after nearly a year of relentless enthusiasm for AI.
The losses centred on the same companies that had driven markets to record highs since early 2024: Nvidia, Meta Platforms, Microsoft, Alphabet, Amazon, Palantir Technologies and Oracle. Nvidia — the company supplying the chips powering nearly every major AI model — saw the largest valuation decrease. Meta, Microsoft and Amazon were also heavily affected as investors reassessed the scale of investment required to maintain their leadership in the AI race. Palantir, which had surged on expectations of new state and defence contracts linked to AI adoption, experienced one of the most dramatic percentage declines.
The correction did not stem from weak earnings or a sudden collapse in demand for AI. Instead, it shows a market transitioning from excitement to accountability.
Valuations had been running ahead of fundamentals. Many companies were priced at levels that assumed uninterrupted, exponential AI adoption. Nvidia in particular had been trading at earnings ratios far above historic norms, pushing investors to lock in profits.
At the same time, the cost of participating in the AI race has escalated dramatically. Companies are committing billions towards data centres, chip procurement, and cloud infrastructure. Meta’s spending plans for AI represent the largest capital investment cycle in its history, while Microsoft and Amazon are building new data-centre capacity at volumes that rival the energy use of small countries. The concern is no longer whether AI is transformative, but whether these investments will generate returns fast enough to justify the scale of spending.
Another factor is that revenue from AI, while visible, is not yet transformative. Tech companies are showcasing new AI assistants, enterprise automation tools and productivity upgrades — but monetisation depends on how quickly corporate customers roll out full adoption. Many businesses are still testing AI, rather than deploying it across their organisations, delaying revenue recognition.
The structure of the stock market amplified the downturn. Major US and global indices are dominated by large technology companies. When the megacaps decline at the same time, index-tracking funds and passive investment strategies accelerate selling, pushing prices even lower.
Despite the violent market reaction, analysts are not calling this the end of the AI boom. In many sectors, demand continues to strengthen. Data centre construction pipelines are at historic highs and global demand for AI chips still exceeds supply. Corporations are expanding AI budgets across sectors including logistics, finance, manufacturing, cybersecurity and healthcare as automation benefits become tangible.
The difference now is that investors are demanding proof that the enormous investment in AI infrastructure will generate profitable revenue streams. The next earnings cycle will be pivotal. If companies can demonstrate accelerating customer adoption — particularly on cloud platforms operated by Microsoft, Amazon and Google — confidence could return rapidly.
The AI correction is not a collapse. It is a reset. The market is moving from hype to measurable outcomes.
AI remains one of the most transformational technological shifts of this century. The sell-off merely signals that investors are no longer willing to finance ambition without evidence that those ambitions can convert into stable, recurring revenue.
If companies deliver proof in the coming quarters, this moment may be remembered not as the end of the AI rally, but as the point where the sector finally matured.
Source: Meta, Microsoft, Alphabet, Amazon, Palantir, Oracle, FT, Bloomberg and CIJ.World Analysis Team
