“The AI bubble has burst”? Stocks really crashed, but it's not a collapse yet

True. On November 5, 2026, the Nasdaq fell 5.5% (to 24,315 points, almost 12% below its October record), the S&P 500 fell 4.4%, its worst day since April 2025, and the Dow Jones fell 3.4% (1,833 points). The Nasdaq 100 index of the largest companies lost 6.3%, its worst day since March 2020. The chipmaker index fell 12%. Nvidia lost 9.3% and turned negative for the year (−2.6%), AMD fell 17.3%, and CoreWeave (rents out computing power for AI) fell 9.8%. Reuters estimated that the Nasdaq lost about $2 trillion in value; other outlets put it at $2.3–3 trillion, counting by different indexes.^{[1][2][3][4][5]}

Not proven. One day of heavy losses is not a collapse: on November 9 the S&P 500 had its best day since April. For the week through November 6, the Nasdaq was just over 10% below its October record, and the S&P 500 lost 2.7% for the week. That is what traders call a “correction,” not a crash that wipes out most of the value, as in 2000–2002. JPMorgan says it sees no reason to keep selling AI stocks, and Morgan Stanley expects gains by the end of the year. At the same time, the IMF and the Bank of England warned even before the drop about the risk of a sharper fall if expected profits from AI don't materialize. Whether the “bubble” has burst will only become clear in months, from company profits and orders.^{[7][8][27][21][22]}

No. The hardest hit were makers of chips and memory and companies building data centers: on November 5, AMD fell 17.3%, CoreWeave 9.8%, Broadcom and Nvidia about 9–10%, and Japanese chip equipment makers Advantest and Lasertec about 12%. But on the same day, Hong Kong's tech index rose more than 5%, Alibaba and Tencent shares rose 6.4%, and the US company AppLovin gained 31%. In China, by contrast, the main blow since July has fallen on makers of chips and data center equipment, not on the internet giants.^[1][2][15]

Partly true. This is one of the main causes, and company reports confirm it. The biggest companies reported on October 29–30: Alphabet raised its 2026 spending plan to $205 billion, its free cash flow (money left after all investments) for the quarter was negative $9.1 billion, and its shares fell 12%, the worst day in its history. Amazon's cash flow over 12 months was negative $42.4 billion, with planned spending of $220 billion. Intel gave a weak forecast and fell 28.6%, its worst day since 1974; the Nasdaq lost 2.9% on October 30. Five tech giants borrowed $326 billion in 2026, three times more than a year earlier. At the same time, AI revenue is growing: Amazon's cloud business grew 39%, and Intel's data center and AI revenue grew 78%.^[11][9][10]

Both. The trigger was the result of the US congressional elections on November 3: the Democrats won, and Senator Bernie Sanders and a number of politicians are calling for a ban (moratorium) on building new data centers. There is no such law, but Goldman Sachs estimated that restrictions could affect about 45% of planned US capacity, and UBS about 30% of growth through 2028; these are estimates, not decisions. What deepened the drop was not new facts but investor behavior: according to a Nomura strategist, hedge funds were locking in the year's profits, and a Vanda Research analyst called selling by individual investors “full capitulation.” A Jefferies analyst called the drop “a reaction, not a fundamental reassessment.” On November 10, markets fell on a real report: US inflation for October came in above expectations, and the yield on 10-year US bonds rose above 5%; expensive borrowing hurts data center construction.^{[2][1][3][27][8]}

Not only. After November 5, Nvidia got a reason of its own: on November 8, its board announced an independent investigation after reports that CEO Jensen Huang had been targeted by a foreign intelligence service; Huang himself acknowledged a personal relationship. The shares fell 4.3% on November 9 and another 5.5% on November 10. The board said it sees no signs that company secrets were leaked. This is a scandal around one company, not a sign that the whole AI market is falling.^{[12][13][14][8]}

The drop really is very steep. According to Reuters (October 27), the STAR 50 index, which groups Chinese AI and chip companies, fell 40% from its July peak in less than four months, losing about $480 billion. Shares of AI chipmakers MetaX and Moore Threads have roughly halved since July, makers of optical parts for data centers Zhongji Innolight and Eoptolink fell about 60%, and robotics company Unitree halved since August. The CSI 300 index of China's largest companies fell about 20% from its June peak and 8.5% in October, its worst month in a decade. But “the bubble has burst” is the view of fund managers quoted by Reuters; and even after the drop, STAR 50 shares trade at about 100 times annual earnings, versus 30 for the Nasdaq 100.^[15][18][17]

Only partly. The main drop in China happened in July–October, before the US crash, and for its own reasons: shares had multiplied in price, prices lost touch with earnings (at the peak, the STAR 50 traded at about 250 times annual earnings), tax bills arrived, the US threatened to ban Chinese equipment in American data centers, state investors sold into the rally, and the authorities restricted trading on borrowed money. Earnings forecasts for Hong Kong tech companies have been cut by more than 13% since March, and third-quarter results were on average 9% below expectations. The US crash added to it: on November 6 the CSI 300 fell 1.4%, Hong Kong's tech index 1.8%, and Zhongji Innolight 9.2%. But over the same week, Hong Kong's tech index rose 8.6%, its best week since February 2025.^{[15][17][16][20]}

No. On November 2, the regulator allowed companies to buy back their own shares even below the offering price. On November 3, China's central bank held a third round of a program that gives brokers and funds money to buy shares (bids topped 100 billion yuan) and cut the rate on loans for share buybacks to 1%. On November 6, Premier Li Qiang called stabilizing the market a key task. According to press reports, the regulator also verbally asked banks to pause new share offerings; this has not been officially announced.^[19][18][16]

Opinions differ, and they are opinions, not facts. On September 28, investor Michael Burry wrote that “the AI bubble may burst sooner rather than later” and bet against shares of Micron, Nebius and Palantir. On October 13, the IMF warned that the world economy is “standing on one leg — the AI leg” and estimated that a sharp drop in AI investment would cut global GDP by 1.1% by 2028. The Bank of England doesn't use the word “bubble” but writes about the risk of a sharper price drop. On the other hand, after November 5, JPMorgan, Morgan Stanley and Deutsche Bank saw the drop more as a buying opportunity.^{[23][21][22][7]}

After the release of the Chinese DeepSeek model, Nvidia loses 17% and almost $600 billion in value in a day; people also talked about the end of the AI boom back then.^[30]

The STAR 50 index of Chinese AI and chip companies hits its peak and then starts to fall.^[15]

Burry writes that the AI bubble may burst sooner than he thought.^[23]

The IMF warns about the world economy's dependence on AI and the risk of a drop in AI stock prices.^[21]

Reuters publishes an analysis: the STAR 50 has fallen 40% since July. UNIAN (a Ukrainian news agency) retells it under the headline “The AI bubble has ‘burst’ in China.”^[15][24]

Alphabet raises its 2026 spending to $205 billion while its cash flow is negative; its shares fall 12%.^[11]

Intel falls 28.6% after a weak forecast, the Nasdaq 2.9%: investors doubt that AI spending will pay off.^[9][10]

Roscongress (a Russian state-backed forum organizer) predicts that “the AI bubble will deflate” in the first half of 2027.^[25]

US midterm congressional elections. On the same day, China announces new measures to support the stock market.^[19][2]

The market rises after the election: the Dow Jones gains 1,569 points (+3%).^[6]

The crash: Nasdaq −5.5%, S&P 500 −4.4%, chip index −12%, Nvidia −9.3%. Hong Kong internet companies rise on the same day.^[1][2][4]

Chinese AI stocks fall after the US, but it is still the best week for Hong Kong's tech index since February 2025. Kursiv asks, “Has the US AI bubble burst?”; the AIERA blog writes that one day doesn't prove the bubble has burst.^[16][26][27]

Nvidia's board announces an independent investigation involving the company's CEO.^[12][14]

The S&P 500 has its best day since April; Nvidia falls 4.3% because of the scandal. The Jackis' Nest newsletter comes out with the headline “AI bubble has burst!”^[8][13][28]

October inflation comes in above expectations, bond yields rise above 5%; Nasdaq −0.7%, Nvidia −5.5%.^[8]

Analysis of the 40% drop in China's STAR 50 index: the causes are inflated prices, taxes and threats of US bans; fund managers talk about a burst bubble.^[15]

A retelling of Reuters under the headline “The AI bubble has ‘burst’ in China,” with the word “burst” in quotation marks.^[24]

Detailed figures on the November 5 crash; the causes are expensive borrowing, the risk of pauses in data center construction after the election, and bubble fears.^[1]

Roscongress forecast: the AI bubble is expected to deflate in the first half of 2027; the method is not disclosed.^[25]

A question headline, “Has the US AI bubble burst?”; the experts interviewed call the drop a correction, not a collapse.^[26]

Strategists at JPMorgan, Morgan Stanley and Deutsche Bank think the drop is close to its end and see no reason to keep selling AI stocks.^[7]

Analysis “Did the AI bubble pop on November 5?”: one day is a sharp repricing of risk, but not proof of a collapse.^[27]

Interest in the search “did the ai bubble just pop” rose 1,400% in a week, and “is the ai bubble popping?” rose 850% (growth in interest, not the number of searches).^[27]

2026-11-06

A newsletter headlined “AI bubble has burst! Nearly $3 trillion vanished in a single day.”^[28]

2026-11-09

A video titled “The AI Bubble Already Burst. You Just Didn't See It.”; we couldn't open its date or view count.^[29]

Outcome: Nvidia lost 17% and almost $600 billion in a day, but the boom continued: in October 2026 the Nasdaq was setting records.^[30][1]

Outcome: World stocks lost $10 trillion in 10 days, but by early May the S&P 500 had recovered its losses, and on June 27, 2025, it hit a record.^[31]

Outcome: Chinese authorities themselves warned of a bubble risk; robot sales are growing, but mostly to labs and exhibitions.