Nasdaq 100 Lost More Than $2 Trillion in October as Investors Question AI Returns

The Nasdaq 100 lost more than $2 trillion in market value in October as investors questioned heavy artificial intelligence (AI) spending’s payoff, while financing risks also drew attention.

During October, investors shifted from AI shares toward safe-haven bonds. On Oct. 22, the yield on the 10-year U.S. Treasury fell nearly 20 basis points, or 0.20 percentage point, its steepest one-day decline since early 2023.

The International Monetary Fund (IMF) listed a possible AI-related market correction and a sharp rise in sovereign bond yields as separate risks in its Oct. 12 Global Financial Stability Report. The report said those risks could tighten financial conditions and disrupt markets. A downturn in AI investment or profitability could prompt related assets to be repriced, while leverage and concentrated exposures could magnify the effects. The IMF framed this as a risk scenario, not evidence that an AI correction had already caused systemic stress.

Since 2024, hyperscalers’ share of global investment-grade bond issuance has risen from below 1% to 10%. The figure measures their share of issuance, not a dollar amount. In a separate review, the IMF examined 14 publicly disclosed transactions dating from 2023. They involved about $300 billion in equity and $650 billion in debt tied to $1.4 trillion in future revenue commitments.

The review’s figures measure different parts of the financing picture: bond issuance, equity, debt and future revenue commitments. The $1.4 trillion figure represents future revenue commitments, not additional borrowing. About $320 billion of the debt was assumed by investee companies through circular-financing arrangements, including off-balance-sheet borrowing. That amount is just under half of the $650 billion debt total.

The IMF identified leverage and concentrated exposures as ways a potential correction could have a wider impact. It also said markets remained resilient, and its severe stress scenario found the banking sector resilient overall.