Nasdaq dives more than 750 points as investors worry massive AI spending won’t pay off

Updated on: October 22, 2026 / 4:32 PM EDT / CBS News

Stocks slid sharply on Thursday amid mounting concerns over whether massive investments in artificial intelligence will pay off and high oil prices.

Shortly before the close of trading, the Nasdaq Composite Index, where many technology companies exposed to AI are listed, tumbled 751 points, or 2.8%, before rebounding slightly to close 694 points lower at 26,009. The broader S&P 500 fell 1.2%, while the blue-chip Dow Jones Industrial Average eked out a small gain of less than 0.1%.

Investors are increasingly worried about the enormous debt AI companies are taking on to finance data center spending and whether the companies will generate the profits investors are banking on, according to Wall Street analysts.

"AI growth is dependent on capex (this is one of the most capital-intensive industries ever), and since capex is dramatically outpacing op. cash flow, companies are reliant on the largess of equity and debt investors to underwrite all the spending, but lately those markets are becoming increasingly less accommodating," Adam Crisafulli, head of Vital Knowledge, said in a research note to investors on Thursday.

Slowing debt issuance as the credit environment tightens could hinder companies'…

Original source: https://www.cbsnews.com/moneywatch/