Nasdaq Falls More Than 4% as AI Spending Returns Face Scrutiny

The Nasdaq Composite fell more than 4% this week as investors questioned the returns on heavy artificial intelligence spending, even as TSMC projected stronger-than-expected revenue on resilient chip demand. Technology shares declined, led by chipmakers and AI infrastructure providers. Investors focused on the cost of expanding AI infrastructure, borrowing costs and whether the investments will generate returns. TSMC’s revenue outlook pointed to resilient demand for semiconductors and AI chips. The projection stood against a week of losses across technology stocks, putting chip demand and the financial payoff from AI investment in focus at the same time. AI infrastructure costs could leave Amazon, Alphabet, Oracle and Meta with negative free cash flow, while Microsoft may avoid that outcome. A recovery is expected if AI revenue accelerates and capital expenditure growth slows.

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