AI spending jitters wipe $797 billion from US tech giants in single session

U.S. technology stocks recorded one of their steepest one-day declines Thursday as concerns over heavy artificial intelligence spending hit the world's largest listed companies. Bloomberg's Magnificent Seven index fell 4.8%, erasing roughly $797 billion in market value from the group. The selloff pulled the broader S&P 500 down 1.2% and the tech-heavy Nasdaq 100 down 1.9%. It followed quarterly results released after Wednesday's close by Alphabet and Tesla, both of which signaled significantly higher capital expenditure. Alphabet raised its full-year spending outlook to as much as $205 billion, while Tesla Chief Executive Elon Musk told investors that 2026 would be a major year for capital spending. Analysts cited growing uncertainty over the returns on multibillion-dollar AI infrastructure investments, along with rising tensions involving Iran and a surge in oil prices, as factors amplifying the pressure. The Magnificent Seven index has now lost about 11% since its late-May peak, wiping out roughly $2 trillion in market value. Tesla shares slid 15%, Alphabet fell 7.1%, Microsoft 2.2%, Amazon 4.6% and Meta 3.4%. Apple, which has taken a more cautious spending approach, was the group's smallest decliner.