Since last Friday, the aggregate market capitalization of the eight most valuable US firms deeply intertwined with the AI surge, encompassing names like NVIDIA, Microsoft, and Amazon, has taken a nosedive, plummeting by roughly $800 billion. This brings their total losses close to the staggering $1 trillion mark, marking the most dismal single-week showing for tech stocks. Consequently, the Nasdaq Composite Index has witnessed a 3% drop this week. The chief of macro research at Lombard Odier Investment Managers highlighted that the current scenario of extensive capital investments heavily dependent on debt financing bears a striking resemblance to the tech bubble era of 2000.

NVIDIA, in particular, has borne the brunt, with its market cap shrinking by about $350 billion. Meanwhile, shares of Microsoft, Oracle, and Broadcom have also taken a hit. Escalating worries about overvalued tech enterprises, compounded by indications of a flagging US labor market and waning consumer confidence, have only intensified investor unease. This has led retail traders to adopt a cautious, wait-and-see stance this week.