Nasdaq 100 Index Approaches Technical Correction Territory
N.R. Finch
The Nasdaq 100 fell 1.6% Tuesday, now just short of a technical correction — the slide from peak to near-correction took only 38 trading days, as doubts over whether massive AI capital spending will ever pay off are repricing the index at accelerating speed.
How fast is this sell-off?
The Nasdaq 100 is one bad session away from a technical correction — a 10% decline from its peak — reached in just 38 trading days.
For comparison, the previous correction took over 100 trading days from the October 2025 high to hit the same threshold.
This means → selling pressure is concentrating roughly three times faster than the last episode, a sharp acceleration in sentiment deterioration.
Why is AI taking the blame?
The immediate trigger was Alphabet's earnings: AI-related capital expenditure was so large that free cash flow turned negative for the first time since the company went public.
Management signaled spending would expand further — and even strong cloud-revenue growth was completely overshadowed by the capex burden.
In plain terms = investors are asking one question: when will all this AI spending start earning money? Alphabet's answer made them more nervous, not less.
What comes next?
Three more heavyweight AI spenders report this week: Microsoft and Meta on Wednesday, Amazon after Thursday's close.
The market is watching two things: capex guidance (how much more they plan to spend) and AI monetization progress (whether the spending is starting to generate returns).
This means → these three earnings will act as a short-term verdict on the core "is AI investment worth it" narrative — if the answers disappoint again, the correction threshold will most likely be formally breached.
Content is for reference only, not financial advice.