Key facts
- Nasdaq 100 set to lose over $2 trillion in market value in October.
- AI trade has faced turbulence, with the index down over 5.8% so far this month.
- Hyperscalers Meta, Alphabet, and Amazon are increasing AI infrastructure spending forecasts.
- Rising borrowing costs are making debt-funded investment more expensive.
- Microsoft is planning a $25 billion investment-grade bond sale.
- J.P. Morgan expects global AI capex to reach $5.5 trillion by 2030.
The tech-heavy Nasdaq 100 is poised to lose over $2 trillion in market value this October as investor scrutiny intensifies on whether massive artificial intelligence spending can yield timely returns. The index has already fallen more than 5.8% this month amid concerns over escalating AI outlays, rising borrowing costs, and the potential for increased capital markets activity by Big Tech firms.
While Alphabet and Meta have raised concerns with disappointing results and large fundraising plans, Microsoft and Amazon have shown positive signs of AI investments beginning to generate returns, particularly in cloud computing. The increasing reliance on debt funding for AI initiatives is emerging as a new risk, challenging the notion that these companies are insulated from broader macroeconomic pressures.