Nasdaq-100 Hits Third Correction of 2025 Amid AI Concerns
The Nasdaq-100 has tumbled into its third correction of the year as worries about AI valuations keep hammering tech stocks.
The tech selloff that kicked off in October isn't letting up. The Nasdaq-100 has now slid into its third correction of the year, a milestone that should have every growth investor paying close attention. Three corrections in a single calendar year signals something deeper than routine profit-taking — it suggests the market is genuinely wrestling with what these mega-cap tech names are actually worth.
AI is front and center in this debate. The narrative that powered the Nasdaq's massive run-up is now the same one spooking traders on the way down. Questions about whether AI spending is translating into real earnings growth — or just burning cash for hyperscalers and their suppliers — are getting louder every week. When the story that drove the rally starts to crack, corrections can turn into something worse.
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That's the word nobody wants to say out loud: bear market. A bear market would require a 20% drawdown from the peak, and the Nasdaq-100 isn't there yet. But three corrections in one year chip away at investor confidence fast. Each bounce that fails to hold a prior high makes the next drop feel more serious.
If you're holding high-multiple tech names right now, the risk-reward calculus has shifted. This isn't a dip-buying slam dunk anymore. Watch how the index reacts at key support levels — how it behaves on the next rally attempt will tell you a lot about whether bulls still have any real conviction left in this trade.
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