Why tech stocks are getting hammered (www.latimes.com)

Tech stocks connected to the artificial intelligence (AI) sector have seen significant declines, with the Nasdaq dropping around 2% as investors react to high valuations and geopolitical tensions, particularly the recent war with Iran. This sell-off has heavily impacted chipmakers, leading to sharp falls in shares from companies like Nvidia, Qualcomm, and Micron Technology, raising concerns about a potential AI market bubble. Despite ongoing AI adoption—with a reported surge in AI chatbot usage among U.S. adults—this volatile environment raises questions regarding future profitability as tech companies continue pouring billions into AI infrastructure and data centers. Key economic factors, including rising interest rates and inflation, contribute to this uncertainty, making investors wary. As major players like OpenAI and Anthropic eye public offerings, and with projections for AI spending to hit $2.59 trillion by 2026, analysts are caught in a "gut-check moment" regarding tech stocks. The overall sentiment suggests confidence in AI's long-term impact, yet the market's immediate reaction underscores the precarious balance between soaring innovation and economic realities. Investors are particularly focused on upcoming earnings reports, such as that from Micron, which could signal demand trends that might influence market direction.