Dan Skelly, Head of Market Research & Strategy at Morgan Stanley Wealth Management, discusses AI capex expansion and valuation pressures.
A selloff in several tech giants weighed on stocks amid lingering anxiety over the outlook for artificial intelligence that has recently hammered the group as well as dozens of companies across a number of industries. Bitcoin extended its February rout. Gold sank.
The Nasdaq 100 deepened a plunge that’s already putting the index on track for its worst month since March 2025. A key gauge of chipmakers like Nvidia Corp. and Broadcom Inc. slipped 1.5%. A closely watched exchange-traded fund tracking software firms dropped 2.9%. The slide in tech drove the S&P 500 below a key technical level: its average price of the past 100 days.
The turmoil unleashed by AI reflects fears that are increasingly at odds. One is that it’s poised to disrupt entire segments of the economy so dramatically that investors are dumping the stocks of any company seen at the slightest risk of being displaced by the technology. The other is a deep skepticism that the hundreds of billions of dollars spent in AI will deliver big payoffs anytime soon.
In what’s turning out to be a great quarter for corporate earnings growth, mentions of AI disruption on management calls almost doubled compared to the previous quarter, a Bloomberg News analysis of transcripts shows. While the technology hasn’t yet noticeably reduced earnings estimates, investors aren’t waiting around and instead are selling any company perceived to be at risk.
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