Following years of outsized gains, the world’s largest tech stocks took a beating to begin the year, only to rebound after fears of artificial intelligence disruption eased.
In early February, the world’s most valuable technology stocks suffered sharp declines, as investors began to question whether the heavy investment in AI would generate enough returns to justify the lofty valuations.
Microsoft shares initially fell 17% over concerns about its AI business and growing competition from Google’s latest Gemini model and Anthropic’s Claude Cowork AI agent, wiping more than $600 billion off its market value as of Feb. 13.
Amazon lost 13.85% in the same period, or $343 billion in market value, though Amazon said it expects its capital spending to jump 50% this year.
Nvidia, Apple and Alphabet also saw significant declines to start the year.
The pullback signifies a broader shift in market psychology, with investors moving away from rewarding long-term AI ambitions and toward demanding near-term earnings visibility after runaway speculative enthusiasm.
By contrast, TSMC, Samsung Electronics and Walmart added $293.89 billion, $272.88 billion and $179.17 billion in market value, respectively, over the same period, lifting their valuations to $1.58 trillion, $817 billion and $1.07 trillion.
With that, Big Tech saw its own rebound the following week, as AI disruption fears eased and the market responded, with the Dow gaining 350 points at the close on Feb. 24.
Advanced Micro Devices led the way, jumping 8.8% after Meta Platforms announced a multiyear deal with the semiconductor company.
The new partnership entails deploying up to 6 gigawatts of AMD’s graphics processing units for AI data centers. Meta will also invest in AMD through a performance-based warrant for up to 160 million shares of the chipmaking giant.
Meta also announced it was using millions of Nvidia chips in its data center buildout, fostering a 0.7% bump in Nvidia shares.
DocuSign and Salesforce were up 2% and 4%, respectively, both having worked with Anthropic, as Claude Cowork is now able to connect to DocuSign, as well as existing tools like Google Drive and Gmail.
“It seemed to me that the market itself was in a sell-first, ask-questions-later mentality,” said Anshul Sharma, chief investment officer at Savvy Wealth. “It has been for some time, and that’s why you saw some of even the enterprise software guys take a rather large hit.”
Sharma added that there may be sentiment circulating on Wall Street that AI might not be replacing enterprise software so quickly after all.
“It’s unbelievably risky from a liability perspective for very large companies to say, ‘Okay, we’re going to now move away from enterprise software—which has been tried and true, which has been tested and which aligns with our risk parameters—and then build it in-house, and this is all going to happen in the next couple of months, next couple of quarters,’” he said. “The drawdown in software was a very immediate reaction.”
Tech stocks continued their rebound after the president’s State of the Union address and through Nvidia’s anticipated quarterly earnings report on Thursday, as the chipmaker reported record revenue for the fourth quarter of fiscal 2026 of $68.1 billion, up 20% from Q3 and 73% from a year ago.
