Global equities extended losses on Wednesday as market investors reassessed high valuations in the technology sector, particularly among companies tied to artificial intelligence (AI) and cloud tech infrastructure.
The downturn saw major Asian indices suffer their steepest declines in months, while European and U.S. futures also pointed lower.
In Asia, Japan’s Nikkei 225 fell by nearly 7 % from its record high, and South Korea’s KOSPI dropped as much as 6.2% during the session. In Europe, the pan-European STOXX Europe 600 index declined about 0.3 %–0.4 %, pulled lower by tech-sector losses. Meanwhile, on Wall Street, the Nasdaq Composite dropped around 2 %, while the S&P 500 fell over 1 %, as investors trimmed exposure to high-valuation technology names.
On the contrary, the gold price rose yet another time and the yen strengthened as risk appetite faded, signaling a broader flight to safety. Bitcoin, that for some investors is a next-gen digital gold asset, briefly fell below $100,000 before recovering
Nigel Green, CEO of deVere Group, said the shift reflects an overdue market recalibration after a period of exuberant gains.
“AI and tech valuations have been expanding faster than earnings for some time,” he noted. “The innovation is genuine, but profitability still has to prove itself — markets are now asking for evidence rather than expectation.”
The selloff follows a year of record growth across AI and cloud infrastructure firms, where companies like Nvidia, Microsoft, and Amazon Web Services have seen valuations and revenues soar on surging demand for computing power and generative AI services. Analysts note that while the AI-cloud ecosystem continues to reshape industries and attract investment, recent volatility shows investors are seeking clearer links between innovation and sustainable profit.
Market observers expect continued fluctuations as the sector transitions from speculative enthusiasm toward earnings-based valuation models. Despite the turbulence, long-term outlooks remain positive, with AI and cloud technologies still viewed as foundational to global digital transformation.
