A sharp sell-off in technology stocks has sent shockwaves through financial markets around the world, raising fears that the artificial-intelligence boom may have reached a turning point. Investors were spooked by warnings from major bank executives that markets could be due for a painful correction.
In the United States, the Nasdaq fell nearly 2 % and the S&P 500 lost just over 1 %, marking one of the sharpest single-day declines this month. Tech shares bore the brunt of the losses as the once-unstoppable “Magnificent Seven” all moved lower.
Palantir Technologies, a data-analytics company heavily associated with AI applications, suffered a particularly steep fall of nearly 8 %, despite raising its revenue forecast a day earlier. Its drop was exacerbated by news that famed investor Michael Burry had placed short bets against both Palantir and Nvidia.
Burry, known for predicting the 2008 financial crisis, argued that AI valuations had become detached from fundamentals. Palantir’s CEO, Alex Karp, quickly hit back, accusing short-sellers of “trying to call the AI revolution into question.”
Asian markets followed Wall Street’s lead. Japan’s Nikkei dropped more than 5 %, while South Korea’s Kospi also lost ground amid a broad pullback in tech-heavy sectors. The sell-off extended into Europe, where benchmark indices in London, Paris and Frankfurt also turned red.
Market strategists say the reversal underscores how dependent recent gains have been on a small group of high-valuation AI firms. “There’s a growing sense that the excitement has run ahead of earnings reality,” said one Deutsche Bank analyst.
Bitcoin also joined the decline, slipping briefly below $100,000 as investors sought safety in less volatile assets. The cryptocurrency has now endured one of its worst months in a decade, falling more than 3 % in October alone.