US tech stocks tumble as investors fret over AI spending

Tech-heavy Nasdaq falls 2.6 percent as debate rages over whether AI is a bubble.US tech stocks have dropped sharply amid market jitters over the sustainability of companies’ enormous capital investments in AI.The Nasdaq Composite, which is dominated by tech firms linked to the AI boom, fell 2.6 percent on Thursday, its steepest fall since the index tumbled 4.2 percent on June 5.Recommended Stories list of 4 itemslist 1 of 4US-sanctioned ICC wins Sakharov Prize, EU’s top human rights awardlist 2 of 4Hundreds of Ethiopians cross into Kenya to flee regional fightinglist 3 of 4Almost all shallow-water coral reefs now face extinction risk, study warnslist 4 of 4UK Conservative Party leader responds to Al Jazeera investigationend of listThe broader S&P 500 slid 1.21 percent, the benchmark’s biggest drop since a 1.52 percent decline on July 29.Apart from Apple, each of the “Magnificent 7”, which make up more than one-third of the overall market, saw substantial losses.Meta dropped nearly 7 percent after it raised its projected capital spending for this year to $135bn to $145bn in its latest earnings report, even as the Facebook parent company’s net profit fell short of expectations.Amazon fell 4.6 percent, while Nvidia dropped 4.4 percent.Tesla and Alphabet both fell 3.1 percent, while Microsoft declined 2.2 percent.Apple rose 1.2 percent.The sell-off extended to other major tech players, including Intel and Advanced Micro Devices, both of which fell about 8 percent, and Broadcom, which slid 4.3 percent.Rising oil prices since February, due to the fallout of the US-Israel war on Iran, added to the downbeat mood.Brent crude futures rose 4 percent on Thursday and continued to climb on Friday morning, taking the international benchmark above $114.20 a barrel, its highest since May.Stocks slip in Asian tradingMajor stock markets in Asia opened lower on Friday, following the losses on Wall Street.Japan’s benchmark Nikkei 225 fell more than 2 percent in morning trading before recovering some ground, while South Korea’s KOSPI dropped as much as 3.5 percent.