Shares of US technology megacaps fell broadly on Monday as investor anxiety over the return on AI capital expenditure deepened, with hyperscalers including Alphabet and Amazon facing a combined reduction in market value running into the tens of billions of dollars.

Key Highlights

  • Alphabet fell 5.32% to $348.45 and Amazon fell 4.05% to $234.49, dragging the Nasdaq Composite down just under 1%.
  • SpaceX extended its post-IPO decline for a third consecutive session as euphoria gave way to valuation scrutiny.
  • Investors are increasingly questioning whether hyperscaler AI capital deployed will generate commensurate returns.

SpaceX contributed to the sector's negative tone, declining for a third consecutive session as the post-IPO euphoria gave way to scrutiny of the company's valuation relative to its current free cash flow generation. The Nasdaq Composite fell just under 1% on the day, underperforming the Dow Jones Industrial Average, which gained on financial and industrial strength.

The selloff reflects a structural tension in the AI investment cycle: demand for compute infrastructure continues to grow, but institutional investors are increasingly questioning whether the capital deployed by hyperscalers will generate returns commensurate with the scale of spending. The two-sided debate is becoming the defining valuation argument for technology equities in the second half of 2026.

The rate repricing dynamic adds a further headwind. With Bank of America and Deutsche Bank now projecting a September Fed rate hike, the discount rate applied to future AI earnings is moving higher even as near-term revenue visibility remains uncertain, a combination that is mechanically compressive for technology multiples built on terminal value assumptions.