Nasdaq Plummets as Investors Fear Record AI Spending Won't Pay Off
The Nasdaq Composite plummeted to a seven-week low on July 28, 2026, as investors grew increasingly concerned about the rapid spending on AI infrastructure by major tech companies. The benchmark fell to 24,932.08, down 43.74 points or 0.18%, after early selling pushed it from above 25,200 to an intraday low near 24,780.
The sharp decline was largely driven by investors questioning the return on investment for these massive spending plans. Tech giants such as Alphabet and Meta have recently increased their capital expenditure outlooks, with the four largest hyperscalers now expected to spend around $730 billion on AI infrastructure in 2026. This is in addition to Wall Street's anticipation of another increase in 2027.
The spending will support demand for data centres, networking equipment, AI accelerators, custom silicon, and power infrastructure, benefiting suppliers such as Nvidia, Broadcom, Micron Technology, and Taiwan Semiconductor Manufacturing. However, investors remain focused on whether these record investments can generate returns quickly enough to justify the pace of spending.
Bitcoin also felt the impact of the risk-off sentiment, dropping below $63,000 amid broader pressure across equities and cryptocurrencies. The cryptocurrency traded at $63,391.13, down 2.96% over the past 24 hours, with a trading volume reaching $27.76 billion and a market capitalization standing at approximately $1.27 trillion.