The Nasdaq 100 has officially crossed the correction threshold, dropping more than 10% from its recent peak as of July 28. The culprit: a brutal selloff in semiconductor and memory stocks that has investors questioning whether the AI spending boom is a feature or a bug.
Dell cratered 13%. Intel shed 7%. Several memory manufacturers fell roughly 10%. And that was just the US session.
The AI spending problem nobody wants to talk about
JPMorgan projects that hyperscalers, the cloud giants bankrolling the AI revolution, will spend nearly $870 billion on AI-related infrastructure by the end of 2026. That’s a 77% increase year-over-year.
The anxiety didn’t stay contained to US markets. Asian exchanges got hit even harder, with Samsung and SK Hynix both plunging more than 15%. The catalyst there was especially pointed: reports emerged that a Chinese state-backed company has begun mass production of chipmaking equipment, a development that threatens to reshape the competitive dynamics of the entire semiconductor supply chain.
This isn’t the first correction of 2026
The Nasdaq already went through a correction back in March 2026, part of a broader market rout that wiped out approximately $17 trillion in value across global markets.
SpaceX joined the Nasdaq 100 on July 7 following its IPO, which was supposed to be a marquee moment for the index. Instead, SpaceX shares had already corrected significantly from their initial highs by the time the company was formally added.
What this means for crypto investors
The March 2026 correction illustrated this dynamic clearly. During that $17 trillion market rout, crypto equities faced intensified selling pressure as the broader risk appetite evaporated.
Investors watching this correction should pay attention to whether the Nasdaq stabilizes around current levels or continues sliding toward bear market territory, which would require a 20% decline from recent highs. The smart money is watching whether hyperscaler earnings in the coming weeks justify the $870 billion spending trajectory. If Microsoft, Google, and Amazon can demonstrate that AI revenue is materializing at scale, this correction could be a buying opportunity.