Stock slump raises question if investors are taking profits or getting nervous

A stock slump is prompting investors to question whether tech gains tied to artificial intelligence are becoming profit-taking or a sign of nervousness. The article notes that while companies are spending heavily on AI and building large data centers, skepticism is rising about whether the investments will translate into sufficient productivity and returns. It cites that Alphabet, Amazon, Meta Platforms, and Microsoft plan to spend up to $720 billion this year, mainly on AI data centers. Market pressure intensified as Amazon and Alphabet fell about 5% on Monday, and chipmakers including Nvidia, Micron Technology, Broadcom, and Lam Research led declines on Tuesday. To finance expansion, some “hyperscalers” have turned increasingly to capital markets, including Alphabet’s plan to raise $80 billion by selling shares and Amazon’s $54 billion bond sales, while valuation metrics for AI-linked firms climb sharply.