US tech stocks tumble as investors fret over AI spending

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. The 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.