Nasdaq Plunges 1,421 Points in Tech Rout: Stock Market Today

a red arrow pointing lower in a red 3d box — (Image credit: Getty Images)

It was a bloodbath on Wall Street Thursday, with stocks selling off sharply as market participants took profits on several of this year's biggest gainers. By the time the dust settled, the Nasdaq Composite had suffered its biggest one-day percentage drop since the April 2025 tariff tantrum. Meanwhile, the Cboe Volatility Index (VIX), also known as the market's "fear gauge," hit its highest point since March.

At the close, the tech-heavy Nasdaq was down 5.5% at 24,315 — in correction territory, or more than 10% below its most recent high of 27,599.79 from October 6. The blue-chip Dow Jones Industrial Average surrendered 3.4% to 51,523 and the broader S&P 500 plummeted 4.4% to 7,353.

All 11 S&P 500 sectors closed lower today, with technology by far the biggest decliner. Memory stocks Micron Technology (MU, -17.5%) and Sandisk (SNDK, -22.3%), which have tripled and quadrupled this year, respectively, on enthusiasm for all things artificial intelligence (AI), were two notable decliners.

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And Nvidia (NVDA), a bellwether in the AI industry, slumped 9.3% — its worst day since shedding 17% in the DeepSeek crash on January 27, 2025.

Several hyperscalers who have announced massive spending on AI initiatives also fell, including Alphabet (GOOGL, -2.2%), Meta Platforms (META, -4.0%) and Microsoft (MSFT, -3.6%).

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Why are stocks selling off?

Concerns that Democratic leadership in Washington and several states, from Texas to Ohio, will create headwinds for the data center buildout sparked the sell-off.

The "tech-led correction" is also being "driven by valuations that became completely disconnected from reality," says David Bahnsen, chief investment officer at The Bahnsen Group. "Thursday's market action is what happens when euphoria and hype become the reason why stocks go up, rather than fundamentals, and that's exactly what has been happening with tech stocks."

While opinions may differ across Wall Street, Bahnsen does not see today's rout as a buying opportunity, considering "valuations in the tech sector remain way too high." Instead, he advises investors to "focus on more defensive parts of the market, such as consumer staples and energy stocks. These areas may be less exciting, but they have stable cash flows, and they include companies that have a long history of growing their dividends."

Qualcomm sinks on weak outlook

Qualcomm (QCOM) was hit with a double whammy Thursday, sinking 9.5% on broad-market headwinds and a disappointing earnings outlook.

The chipmaker reported fiscal fourth-quarter earnings of $2.17 per share on revenue of $10.4 billion, both higher than Wall Street expected. But its fiscal 2027 first-quarter earnings forecast of $2.25 per share at the midpoint is below analysts' estimate of $2.27 per share.

"While we recognize QCOM's leading position in modem and single-chip integrated chipset solutions, we believe the company is over-exposed to the mobile market, with its diminishing growth and increasing competition," says Oppenheimer analyst Rick Schafer.

And while Qualcomm is diversifying its revenue streams, including by expanding into the data center market, Schafer is maintaining "a wait and see approach" — and a Perform (Hold) rating — "as efforts outside core handset take root."

AppLovin stock bucks sell-off, soars 31%

Not all AI stocks sold off today. AppLovin (APP), which operates an AI-powered mobile ad platform, jumped 31% — its best day in two years — on a well-received earnings report.

APP's third-quarter earnings of $4.30 per share were up 76% year over year, while revenue jumped 55% to $2.18 billion. The results beat analysts' estimates too.

"We previewed Q3 as the test, and AppLovin passed it," says Wedbush analyst Alicia Reese, who reiterated an Outperform (Buy) rating on APP and raised her price target to $600 from $560 — nearly 70% above current levels. And considering Q4 is "the seasonal peak" for advertisers, Reese believes "e-commerce should inflate" AppLovin's fourth-quarter results.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.