Market Loses Faith in AI Returns as Stock Bubble Deflates

Investors' long-running enthusiasm for artificial intelligence stocks has hit a wall, with the Nasdaq plunging 2.6% on October 23, 2026—its steepest drop since June—as doubts spread about whether massive AI infrastructure spending can ever pay off. Major technology companies including Meta, Nvidia, Amazon, and Microsoft all fell sharply after disappointing outlooks on AI returns and capital spending plans. Meta alone dropped 7% after announcing capex guidance of $135–145 billion for 2026, following a $825 billion commitment in future spending that has drawn investor scrutiny.