More than $2 trillion in market value is set to be wiped from the tech-heavy Nasdaq 100 this month, as a bruising round of Big Tech earnings forces investors to ask whether the billions being poured into artificial intelligence can generate returns quickly enough.
The index has fallen more than 5.8% so far in October, according to Reuters, a decline that would amount to slightly more than the entire market value of SpaceX. The sell-off marks a sharp turn for a trade that has driven global markets for much of the past three years.
The trigger has been spending, not demand. Hyperscalers Meta, Alphabet and Amazon have all raised their spending forecasts further as they race to expand AI infrastructure, and the prospect of ever-larger outlays has unnerved investors, particularly as rising borrowing costs threaten to make debt-funded investment more expensive and harder to justify.
Alphabet suffered its biggest one-day percentage fall on record on Thursday after disappointing results in its core search advertising business and a sharp acceleration in cash burn. Meta’s plans for a record $97.5 billion fundraising heightened concerns about shareholder dilution and whether mounting AI spending could force other Big Tech companies to tap capital markets more heavily.
Microsoft and SpaceX broke from the gloom, with results suggesting AI spending is starting to pay off. “It may be that we’ve overestimated how strong the growth might be, but they’re not going negative in aggregate,” said John Bilton, global head of strategic research at Multi-Asset Solutions. “We have an insatiable and growing demand for data.”
The worry is spreading beyond equities into credit markets. Microsoft is reportedly planning to raise about $25 billion through its first US investment-grade bond sale in more than nine years, while Meta, Amazon and Alphabet have issued hundreds of billions of dollars in bonds over the past four years. Investors are starting to price in the possibility that rising financing costs, combined with slower returns on AI spending, could squeeze companies previously viewed as relatively insulated from macroeconomic pressures.
Yet the underlying revenue story remains robust. Revenue across the “Magnificent Seven” has stayed strong since ChatGPT launched in 2022, with Amazon’s cloud arm, Amazon Web Services, continuing to accelerate, Meta reporting better-than-expected revenue growth and Microsoft forecasting strong cloud growth.
The scale of the bet keeps growing. Morgan Stanley forecasts capital spending on AI infrastructure overall will surpass a trillion dollars next year, while J.P. Morgan expects global AI capital expenditure to reach $5.5 trillion by 2030, with $900 billion spent in 2026 alone. This year’s AI spending by Amazon, Alphabet, Meta, Oracle and Microsoft would likely equal their cumulative spend since ChatGPT’s launch in November 2022, J.P. Morgan analysts noted.
Note on sourcing: the $2 trillion figure is a month-to-date estimate reported by Reuters ahead of October’s final trading session, not a confirmed month-end total.
Sources: Reuters, “Nasdaq faces $2 trillion wipeout in October as AI spending fears deepen”, https://www.reuters.com/business/media-telecom/nasdaq-faces-2-trillion-wipeout-october-ai-spending-fears-deepen-2026-10-30/
