Is the Tech Bubble Bursting? Nasdaq's Slide Echoes 2000

Friday's steep drop in the Nasdaq Composite has put an old question back on trading desks: is the technology rally running out of air? For investors who lived through the late 1990s, the answer depends on how closely today's market resembles the one that peaked in March 2000.

The comparison is easy to make. Back then, a new technology, the internet, drew enormous amounts of capital, and many companies with little or no profit traded at valuations that assumed near-flawless growth for years. Investors piled into anything with ".com" in its name. When sentiment turned, the Nasdaq lost roughly three-quarters of its value over the following two and a half years, and many of the most hyped names disappeared entirely.

Today's leaders look different on paper. The largest technology companies generate large profits and strong cash flow, and much of the current enthusiasm is tied to artificial intelligence, a technology already producing revenue for some of its suppliers. That distinction is the main argument of people who think the bubble comparison is overblown. Those who see echoes of 2000 point to high valuations among the biggest names, a small group of stocks that now carries much of the index, and spending on AI infrastructure that may be running ahead of the income it produces.

Friday's move does not settle the question on its own. One sharp session is not the same as a sustained bear market, and the Nasdaq has recovered from heavy drops before. Investors looking for a real turning point will be watching whether earnings keep pace with expectations, whether market leadership broadens beyond a handful of stocks, and whether borrowing costs and market liquidity hold steady.