"Can They Actually Turn a Profit?" Doubts Trigger Nasdaq's Steepest Drop in Four Months

[Anchor]

It is not just the cryptocurrency market where investment sentiment has frozen. Wall Street in New York also plummeted overnight. As skepticism over AI investments spread once again, the Nasdaq suffered its sharpest drop in four months.

Here is correspondent Kim Hyunwoo from New York.

[Reporter]

New York stock markets wrapped up the final trading session of October in a gloomy mood.

On the 30th local time, the tech-heavy Nasdaq tumbled by nearly 3 percent.

It marked the biggest single-day drop since June.

With the Nasdaq sliding more than 5 percent in October, it recorded its worst monthly performance in a year and seven months.

In particular, semiconductor giant Intel saw its shares plunge nearly 30 percent after its revenue outlook fell well short of market expectations, marking its worst single-day performance since 1974.

Due to the stock price drop, Intel saw about 140 billion dollars—more than 180 trillion won in Korean currency—wiped from its market capitalization in a single day.

Weighing heavily on the broader market were growing doubts over AI profitability.

Investment sentiment shrank significantly as concerns spread over whether massive investments could actually translate into tangible profits.

[Dennis Dick/Chief Investment Officer ( Note: name translated based on general phonetics where applicable): Big tech companies are allocating an increasing share of their earnings to investments. It was 90 percent last year, went to 95 percent, and now it has exceeded 100 percent.]

Moreover, with a growing number of AI companies borrowing money to invest because their earnings are not enough, worries are mounting over whether they will be able to repay those debts on time.

[Ryan Isherwood/Chief Investment Officer: (The recent downward trend) also reflects concerns over financing issues. Many semiconductor and AI stocks could struggle over the next few months.]

While the AI boom has driven the stock market upward until now, AI is now effectively holding the market back.

Experts point out that AI investments are moving beyond vague expectations into a phase where they must prove concrete results.

(Photo courtesy of Yonhap News)
(Reported by Kim Hyunwoo in New York | Video by Lee Hee-hoon | Video Editing by Shin Se-eun)
※ Please note: This article was translated by AI and may contain errors.