US tech stocks lose $1.2 trillion in four-session AI spending rout
Synopsis
A four-session, $1.2 trillion wipeout in US tech has put AI's investment thesis on trial. With Alphabet committing over $200 billion in capex and Tesla missing profit targets, investors are no longer taking Big Tech's AI bets on faith — and the next round of Meta and Amazon earnings could decide whether this is a correction or a deeper reckoning.
Key Takeaways
US tech stocks shed approximately $1.2 trillion in market value across four consecutive trading sessions .
Tesla tumbled more than 16 per cent ; Alphabet , Meta , Amazon , and others fell between 7 and 10 per cent over the same period.
Alphabet raised its full-year capex guidance to over $200 billion , triggering a 7 per cent share price drop.
Nvidia fell 5 per cent , reducing its market cap to $4.77 trillion and allowing Apple to reclaim the title of world's most valuable listed company.
Alphabet , Microsoft , Amazon , and Meta are projected to spend $724 billion on capex in 2025, rising to $950 billion by 2027.
Upcoming earnings from Meta and Amazon are seen as the next major catalyst for tech share direction.
US technology stocks extended their selloff into a fourth consecutive trading session, wiping approximately $1.2 trillion from the sector's combined market value as investors grew increasingly sceptical of surging AI capital expenditure plans and weaker-than-expected earnings from some of the world's largest companies.
What Triggered the Selloff
The rout gathered pace after disappointing results from Alphabet and Tesla. Alphabet shares dropped 7 per cent after the company raised its full-year capital expenditure guidance to more than $200 billion — a figure that rattled investors already wary of AI spending discipline. Elon Musk's Tesla fell nearly 15 per cent after reporting profit that missed expectations and warning that operating expenses would rise further.
Over the four-session stretch, Tesla tumbled more than 16 per cent, while Sandisk, T-Mobile, Meta Platforms, Alphabet, and Amazon each declined between 7 per cent and 10 per cent, according to reports. The Nasdaq 100 index extended its decline through the period, reflecting broad-based pressure on growth and AI-linked names.
Apple Reclaims World's Most Valuable Company Title
The tech decline dragged Nvidia shares down 5 per cent on Monday (US time), cutting the chipmaker's market capitalisation to $4.77 trillion. The drop allowed Apple to reclaim the title of the world's most valuable listed company — a position it had last held in April 2025 — finishing the session ahead of Nvidia by market capitalisation.
The AI Spending Debate at the Core
At the heart of the selloff is a growing investor debate over whether massive AI infrastructure outlays will translate into proportionate revenue returns. Alphabet, Microsoft, Amazon, and Meta Platforms are collectively projected to spend approximately $724 billion on capital expenditure this year, rising to nearly $950 billion by 2027, according to reports. Critics argue that the pace of spending has outrun near-term monetisation visibility.
Notably, this is not the first time AI capex ambition has unnerved markets — a similar dynamic played out earlier in 2025 when DeepSeek's cost-efficient model raised questions about the necessity of frontier-scale investment.
What Comes Next
Investors are expected to closely scrutinise upcoming earnings and capital expenditure disclosures from Meta Platforms and Amazon, which, according to reports, 'could shape the direction of technology shares in the coming weeks.' A key week of results from major global technology companies is now under way, and any further upward revision to spending guidance risks extending the selloff.
Point of View
Yet revenue models that justify it at scale are still nascent. What mainstream coverage underplays is the compounding risk: if Meta and Amazon also revise capex upward this earnings season, the selloff may not be a rotation but a genuine re-rating of AI's near-term value.
NationPress
28 Jul 2026
Frequently Asked Questions
Why did US tech stocks fall for four straight sessions?
US technology stocks fell for four consecutive sessions as investors reacted to weaker-than-expected earnings and sharply higher AI capital expenditure plans from major companies including Alphabet and Tesla. Growing scepticism over whether massive AI spending will deliver near-term returns drove the broad selloff across the Nasdaq 100.
How much market value was wiped out in the US tech selloff?
Approximately $1.2 trillion was erased from the US technology sector's combined market value over the four-session selloff. The Nasdaq 100 index extended its decline throughout the period.
Why did Alphabet shares drop 7 per cent?
Alphabet shares fell 7 per cent after the company raised its full-year capital expenditure guidance to more than $200 billion, alarming investors already concerned about the pace and return profile of AI infrastructure investment.
How did Apple reclaim the title of world's most valuable company?
Nvidia shares fell 5 per cent, reducing its market capitalisation to $4.77 trillion. This allowed Apple to finish ahead of Nvidia by market cap, reclaiming the top position it had last held in April 2025.
What should investors watch in the coming weeks?
Investors are focused on upcoming earnings and capital expenditure disclosures from Meta Platforms and Amazon, which are seen as potential catalysts that could either stabilise or extend the tech selloff. Collectively, Alphabet, Microsoft, Amazon, and Meta are projected to spend around $724 billion on capex in 2025 and nearly $950 billion by 2027.
