Concerns about AI investment returns continue to ferment! The Nasdaq 100 Index has entered a correction for the third time this year, falling more than 10% from its October high.

According to Zhihu Finance APP, as concerns on Wall Street about the returns of massive artificial intelligence (AI) investments by tech giants continue to intensify, the Nasdaq 100 Index once again entered a technical correction on Monday, marking the third occurrence this year. Recently, a series of disappointing earnings reports or performance forecasts from major tech companies have further weakened investor confidence in AI-related stocks.

On Monday, the Nasdaq 100 Index fell by 1.4% to 27,989.82 points, dropping more than 10% from the high reached on October 6, which meets the market’s usual definition of a technical correction. Despite the recent sell-off, the index has still gained about 11% since 2026. However, it has entered a correction three times this year, highlighting investors' shifting attitudes towards AI investment prospects and increasing volatility in the technology stock market.

The main reason behind the current tech stock sell-off is growing concern about the costs of building AI infrastructure and the investment return cycle. In recent years, major tech companies have continuously invested hundreds of billions of dollars to build AI data centers, purchase chips, and expand computing capacity. However, as capital expenditures keep rising, investors are beginning to question how long it will take for these enormous investments to generate sufficient revenue and profits.

Recently released tech giant earnings reports have amplified these concerns. Parent company Alphabet (GOOGL.US, GOOG.US) posted advertising and search business revenues below market expectations last week, causing its share price to register the largest single-day drop since its listing. Meanwhile, Meta (META.US) and Amazon (AMZN.US) also saw significant sell-offs after publishing their latest quarterly results.

The market is worried that these companies, while needing to continue massive investments in AI development, have yet to sufficiently prove that these investments can generate returns matching the scale of spending.

Brian Culpepper, portfolio manager at James Investment Research, said investors are uneasy about tech giants’ relentless spending. “People are starting to feel anxious about these companies spending, spending, and spending again.”

However, he believes the recent technology stock declines do not mean the AI investment craze is over, but that the market’s previous expectations were overly optimistic and some stock valuations rose too quickly. “I don’t think the AI investment boom has ended, but it was admittedly a bit ahead of itself,” Culpepper noted. He pointed out that overall U.S. stock market performance has been quite strong this year, but this has also caused many stocks—especially those linked to AI concepts now spanning many listed companies—to become more prone to overvaluation.

It is worth noting that this sell-off is not limited to the “Magnificent Seven” in the U.S. stock market. During this earnings season, many tech companies have seen historic share price declines due to pessimistic performance outlooks. For instance, chipmaker Intel (INTC.US) and enterprise software provider ServiceNow (NOW.US) both saw record sell-offs after issuing disappointing guidance, reflecting investors' rising expectations for tech companies’ future growth prospects.

Previously, the market was generally willing to pay higher valuations for the long-term growth potential of AI-related companies, but as capital expenditures from tech giants continue to rise, investors are now focusing more on actual profitability, cash flow, and future guidance.