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 will generate enough returns to justify the lofty
valuations.
Microsoft shares initially fell 17% over concerns to its AI business and growing competition
from Google’s latest Gemini model and Anthropic’s Claude Cowork AI agent, wiping over
$600 billion off its market value as of Feb. 13.
Amazon lost 13.85% in the same period, $343 billion in market value, though Amazon said
they expect their capital spending to jump 50% this year.
Nvidia, Apple and Alphabet also saw significant declines to start the year as well.
The pullback signifies a broader shift in market psychology, with investors moving away
from rewarding long-term AI ambitions to demanding near-term earnings visibility after
runaway speculative enthusiasm.
By contrast, TSMC, Samsung Electronics and Walmart have 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 at close of 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 AMDs graphic 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 chip making giant. Meta also announced they were using
millions of Nvidia’s chips in its data center build out, 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 be connected to Docusign, as well as existing
tools like Google Drive and Gmail.
“It seemed to me that 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 chip maker
reported record revenue for Quarter 4, Fiscal 2026, of $68.1 billion, up 20% from Q3, and
up 73% from a year ago.
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