Technology megacaps suffered a devastating $770 billion loss in market capitalization on Friday as the Nasdaq Composite recorded its most significant single-day decline since April. The massive selloff impacted leading artificial intelligence and cloud computing companies, with Nvidia experiencing the most substantial individual loss at nearly $229 billion. The broad-based tech retreat reflects growing investor concerns about valuation levels and economic headwinds affecting the sector.
Nvidia Leads Tech Stock Plunge with $229 Billion Loss
Nvidia, which recently became the first company to reach a $4.5 trillion market capitalization in late September, saw its valuation plummet by nearly $229 billion during Friday’s trading session. The chipmaker fell an additional 1% in extended trading following market developments. Despite the significant decline, Nvidia remains crucial to the artificial intelligence ecosystem, with companies like OpenAI relying heavily on its graphics processing units through cloud suppliers including Microsoft.
Microsoft and Amazon Experience Significant Valuation Declines
Microsoft witnessed an $85 billion reduction in market value despite reporting strong user growth for its AI products. The company recently announced it now serves over 800 million weekly users across its platforms, including the Sora 2 video creation application introduced in September. However, Microsoft faces substantial infrastructure costs to operate its cloud data centers and support AI services.
Amazon’s market capitalization dropped by $121 billion, completely erasing its gains for the year and leaving the stock down 2% in 2025. The online retail giant competes with Microsoft in renting out GPUs from its cloud data centers, though it maintains limited business relationships with OpenAI. Amazon CEO Andy Jassy previously addressed economic concerns, stating, “There continues to be a lot of noise about the impact that tariffs will have on retail prices and consumption. Much of it thus far has been wrong and misreported.”
Broader Tech Sector Impact and Earnings Outlook
The technology selloff extended across multiple sectors and companies:
- Tesla saw its market capitalization decrease by $71 billion despite recently introducing lower-priced vehicles
- Alphabet (Google’s parent company) fell 2% amid the broader market decline
- Meta Platforms declined nearly 4% during the trading session
Upcoming earnings reports will provide crucial insights into the sector’s health, with Tesla reporting third-quarter results on October 22, Microsoft scheduled for the following week, and Nvidia reporting in November. For additional coverage of earnings expectations across multiple sectors, our network provides comprehensive analysis.
Market Context and Investment Implications
The dramatic decline represents the Nasdaq’s most severe single-day drop since April, raising questions about the sustainability of tech valuations amid changing economic conditions. The concentrated nature of losses among megacap technology companies highlights their outsized influence on major market indices. This development comes alongside related analysis of activist investor activity in other sectors, suggesting broader market reassessments may be underway.
While the selloff was severe, many analysts note that fundamental demand for AI technologies and cloud services remains strong. OpenAI continues to experience rising demand for its services, indicating that the underlying technology adoption trends may support recovery once market sentiment stabilizes.
