Why Have U.S. Tech Stocks Suddenly Plunged? Is the AI Bubble Really About to Burst?

Recently, global tech stocks have seen a marked correction, especially companies tied to the AI industry chain. Investors are beginning to reassess the rationale behind AI investments, which have continued to rise over the past few years. Volatility in the share prices of tech giants such as Nvidia, Microsoft, and Tesla has also raised an important question: Is the golden age of the AI industry over?

I think it is too early to declare the AI bubble burst, but the market has indeed entered a phase of more rigorous valuation scrutiny.

First, valuation pressures are mounting. Over the past few years, the AI narrative has driven up the share prices of many tech companies, with some already pricing in growth expectations for years to come. When doubts arise about profitability, high valuations are prone to correction.

Second, the tension between capital expenditure and actual returns is drawing increasing attention. Microsoft, Google, Amazon, and other companies continue to invest huge sums in data centers and AI infrastructure, but investors are really concerned with whether these investments can ultimately translate into sustained revenue and profits.

Third, the high-interest-rate environment remains unfavorable for growth stocks. Financing costs and the pressure of discounting future cash flows make highly valued tech companies more sensitive.

Fourth, market capital is beginning to favor companies with genuine competitive advantages and profitability, rather than simply chasing the AI narrative.

I think the AI industry’s long-term direction has not changed, but the investment rationale may shift: from chasing technological concepts to focusing on commercial adoption, profitability, and cash flow.

The real opportunities may belong to companies that can turn AI technology into actual productivity gains.

Do you think the AI industry is currently going through a normal correction, or are there already early signs of a bubble bursting?