The Nasdaq Has Had 4 Big Selloffs Since 2022. Is This One Different?

The Nasdaq Composite is up 95% since ChatGPT’s launch in November 2022. (Michael Nagle/Bloomberg)

The Nasdaq Composite has fallen 8% from its October highs, as investors fret about valuations for artificial-intelligence stocks, the future of Federal Reserve policy, and the economy. It isn’t the first time the Nasdaq has seen significant declines during this three year stretch of AI-fueled gains.

Since the launch of ChatGPT—and the current AI revolution—in November 2022, the Nasdaq has fallen at least 8% four times, including the latest selloff. After the three prior declines, the Nasdaq returned to all-time highs fairly quickly.

Will this time be different? It’s the big question on everyone’s minds, particularly in the wake of strong Nvidia earnings this week that didn’t trigger a rally in the stock or the market. In an effort to answer what happens next, here’s what we can learn from the other selloffs during the AI age.

February 2023 to March 2023: -9%

Silicon Valley Bank, a financial firm used by many technology start-ups and companies, failed after a bank run and was taken over by the FDIC. The general stock indexes all sold off on risk-off uncertainty, but rallied later in the absence of major long-term effects.

January 2025 to March 2025: -13%

A frenzy over the Chinese AI model DeepSeek sparked worries that large expenditures to train and run cutting-edge models were no longer needed. The worries turned out to be exaggerated as training advanced AI models still required significant resources. AI reasoning models—including DeepSeek — consume vastly more computing capacity for inference, the process of generating answers from already developed AI models.

April 2025 to April 2025: -14%

President Donald Trump announced “Liberation Day,” proposed tariffs on dozens of countries. Stock markets dropped on worries about the potential for a spiraling global trade war. The market eventually rallied as many of the tariff rates were rolled back during negotiations in the ensuing months. The Supreme Court is now weighing whether Trump’s use of IEEPA, the 1977 International Emergency Economic Powers Act, to impose tariffs is constitutional.

October 2025 to November 2025: -8%

Fears about the sustainability of the artificial-intelligence buildout have mounted. Investors have increasingly questioned the size of infrastructure investments by large technology companies and AI start-ups, worried about potential overcapacity.

After the first three selloffs, the market worked through similar fears and rebounded to new highs. Through Friday, the Nasdaq is up 95% since ChatGPT’s launch.

This, time may, in fact, be different—we may have a more sustained selloff driven by a recession, a geopolitical crisis, or even stagflation. But barring those events, the current selloff is likely to be temporary.

The prior selloffs were ultimately short-lived because the underlying fundamentals around tech stocks and AI never changed—and they still hasn’t. Large technology companies have repeatedly raised their capex forecasts this year because they are seeing strong demand. Last month, Microsoft CFO Amy Hood said on the company’s earnings call that AI demand remains “significantly ahead of capacity.”

Enterprises continue to talk about productivity gains from their AI projects. Michael Truell, the CEO of start-up Cursor, said last week that his company’s coding assistant was seeing accelerating demand and was enabling its customers, including more than 60% of the Fortune 500, to ship nearly 40% more code.

Rocket Mortgage has said AI is cutting paperwork processing time by 80%, saving time for employees to focus on higher level work. Logistics firm CH Robinson has said AI has driven a 40% increase in productivity in terms of shipments per employee since the end of 2022, enabling faster and more reliable service.

These anecdotes and data points could become more commonplace in the months to come. If they do, the latest selloff is likely to be one more blip in the AI boom.

Write to Tae Kim at tae.kim@barrons.com