"Microsoft has been hit the hardest by the drawdown, falling roughly 32% from its October peak, on track for its worst start to a year in its history."
"The selloff marks a sharp reversal from years of AI-fueled gains—the index rose 107% in 2023, 67% in 2024, and 25% in 2025."
"Institutional money, it seems, has rotated out of these Big Tech stocks and into energy, industrials and domestic manufacturing."
"Capital Economics wrote in a note on Friday that the S&P 500's IT sector has converged with the valuations of the rest of the index, a pattern that matched the final months of the 2000s bubble."
The Magnificent 7 stocks are experiencing significant declines, with Microsoft down 32% from its peak. Meta and Alphabet have also seen substantial losses. The selloff follows a period of AI-driven gains, with the index previously rising 107% in 2023. Factors contributing to the downturn include rising oil prices, inflation concerns, and a shift in institutional investment away from tech stocks. Comparisons are being made to the dot-com bust, although earnings estimates remain a point of caution against overly negative outlooks.
Read at Fortune
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