Meta slides 4.94% to $1.60 trillion as tech selloff deepens

Meta Platforms lost roughly $83 billion in market value as a selloff in AI and semiconductor stocks deepened.

Meta Platforms Inc. fell 4.94% to a market capitalization of $1.60 trillion on Friday, extending a week-long rout in technology shares triggered by a record drop in South Korean memory chip stocks.

"The selloff reflects growing unease about whether hyperscaler capital spending can sustain current valuation multiples as the AI infrastructure buildout faces new scrutiny," said Sarah Lin, equity strategist at Edgen.

The decline erased gains from earlier in the week, when Meta had climbed about 6% after research firm SemiAnalysis published a positive assessment of the company's AI compute business. The broader technology sector came under pressure after SK Hynix plunged 15% in Seoul — its steepest drop on record — following its US trading debut, dragging Samsung Electronics down more than 10%. In pre-market US trading, Sandisk fell over 6% and Micron Technology dropped more than 5%.

The $83 billion single-day loss shows the concentration risk embedded in the AI trade. With Meta guiding 2026 capital expenditure to as much as $145 billion and the Federal Reserve's policy path uncertain, any sign of softening AI demand could trigger further multiple compression across mega-cap technology stocks.

The selloff extended beyond semiconductors. September Nasdaq 100 futures fell 0.94% and S&P 500 futures slipped 0.29%, pointing to a lower open for US equity benchmarks after the major indices closed higher on Thursday. The S&P 500 had finished at 7,527, up 0.38%, while the Nasdaq Composite closed at 26,269, gaining 0.62%, supported by a 0.3% drop in the June Producer Price Index.

The weakness in tech stocks coincided with a rise in bond yields, with the 10-year US Treasury note climbing 2 basis points to 4.58%. The 30-year long bond yielded 5.09%. Higher oil prices stoked speculation that the Federal Reserve may need to raise interest rates to curb inflationary pressures, weighing on growth-sensitive sectors.

Oil prices added to the macro uncertainty. WTI crude rose more than 3% to above $80 per barrel after the US and Iran exchanged fresh military strikes over the weekend. Tehran said the Strait of Hormuz would be closed "until further notice," though US maritime authorities said shipping continued through its southern route. Brent crude settled at $85.78 on Thursday, up 1.24%.

Gold edged higher, closing at $4,056, up 0.13%, as the uptick in military activity drew safe-haven buyers. Bitcoin traded at $64,145, while Ethereum changed hands at $1,883.

Investors now face a busy week of key events. Federal Reserve Chairman Kevin Warsh is scheduled to deliver his semi-annual monetary policy testimony before Congress on Tuesday and Wednesday, with markets watching for fresh insight into his views on inflation and interest rates. The June consumer price index report, due Thursday, is expected to show headline inflation easing to 3.8% year-over-year, while core inflation is projected to hold steady at 2.9%.

The second-quarter earnings season also kicks off, with JPMorgan Chase, Goldman Sachs, Bank of America, Wells Fargo, and Citigroup all reporting. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average 23% jump in quarterly earnings compared with the prior year.

Rate futures have priced in a 33.7% probability of a 25-basis-point rate hike at the next Federal Reserve meeting, with a 66.3% chance of no change, according to market data.

This article is for informational purposes only and does not constitute investment advice.