Nasdaq 100 Enters Correction Territory as Investors Reassess AI Boom

The Nasdaq-100 has entered correction territory, falling approximately 14 percent from its record high as investors reassess the outlook for artificial intelligence investment and the expansion of data centers, Theron Mohamed, Jennifer Sor and Huileng Tan reported for Business Insider.

Technology stocks fell sharply as the Nasdaq-100 entered correction territory amid concerns about artificial intelligence spending and the future of data center expansion.

The technology-heavy index fell about 6 percent, marking one of the market's sharpest selloffs in more than a year.

Investors sold AI-related stocks and broader technology shares amid concerns that the incoming Democratic-controlled Congress could increase scrutiny of data center construction and AI infrastructure spending.

The Nasdaq-100 had briefly entered correction territory earlier in the week after falling at least 10 percent below its early-October peak.

By Thursday, it had declined approximately 14 percent from that high.

Much of the selling was concentrated in companies involved in AI infrastructure, including semiconductor manufacturers, data center operators and neocloud providers.

The iShares Semiconductor ETF was also on track for its steepest daily decline since 2020, reflecting the pressure on chipmakers and other companies tied to the AI investment cycle.

Investors are now weighing competing concerns: whether technology companies are spending too little or too much on AI infrastructure, whether demand will justify the enormous investments, and whether elevated stock valuations can be sustained.

The uncertainty has intensified following election results that could lead to greater regulatory scrutiny and delays in data center projects across the United States.