Concerns about the cost of artificial intelligence investment triggered sharp losses in American technology shares on Thursday, with the sell-off affecting European markets as investors reassessed the outlook for chipmakers and major digital companies.
The Nasdaq Composite fell 2.6 per cent, while the Philadelphia semiconductor index lost nearly seven per cent. Shares in Meta declined sharply after its latest earnings revived concern over the capital needed to expand AI infrastructure.
Trading stabilised in parts of Asia on Friday, but European shares remained under pressure. The retreat came alongside a rise in oil prices and renewed demand for US government bonds, underscoring investors’ sensitivity to several risks at once.
The underlying issue is whether the enormous spending commitments announced by technology companies can generate sufficient returns to justify current valuations.
Building and operating AI systems requires large data centres, advanced chips, electricity supplies and network infrastructure. The companies financing that expansion are investing before the full scale and profitability of future demand can be known.
Strong revenue growth can coexist with higher costs, rising debt and pressure on cash flow. For investors, the question is not simply whether AI will be widely used, but how its benefits will be divided among software companies, infrastructure providers and customers.
The latest market reaction follows earnings announcements that renewed scrutiny of spending plans. A one-day share-price fall does not establish that the AI sector is entering a prolonged contraction.
European exposure
Europe participates in the AI supply chain through semiconductor equipment, advanced manufacturing, energy infrastructure and cloud services. A repricing of major American technology companies can therefore affect European-listed firms even when their own operating results have not changed.
The Netherlands and France are among the markets with listed technology businesses exposed to global semiconductor demand. Falling shares may also reflect general risk aversion rather than a judgment about an individual company’s prospects.
European policymakers have argued for stronger domestic computing capacity and digital independence. The economic challenge is to support that capability without assuming every investment will earn a commercial return.
Energy prices add pressure
Brent crude’s rise to around $114 a barrel has intensified uncertainty about inflation and borrowing costs. Rising fuel prices can affect both households and power-intensive sectors, while higher interest rates tend to reduce the present value of expected future profits.
Global investors have consequently moved towards government bonds and other perceived safer assets. That shift reflects changing risk assessments, not a forecast that markets will necessarily keep falling.
Future earnings reports, capital-expenditure plans and evidence of customer demand will determine whether this week’s losses become a sustained correction or a short-lived reassessment.
For Europe, the sell-off puts renewed emphasis on the financing and competitiveness of its own technology ambitions.
Christophe Fouquet, the CEO of Dutch tech firm ASML, said last week that the company will incorporate employee satisfaction into its compensation strategy for top executives in an effort to quell discontent over a major reorganization, per a memo to employees obtained exclusively by Business Insider.
Fouquet was responding to the results of an annual survey that polled more than 38,000 of ASML's roughly 44,000 employees.
The survey results, seen by Business Insider, show that ASML's employee engagement index — a measure of worker satisfaction — fell from 78% last year to 73.5% this year.
In the memo, Fouquet said that the declining employee engagement scores "reflect a period of significant change" and acknowledged that it had been a "disruptive and emotional year" for the company.
He added that ASML's executive team had highlighted six questions in the survey and combined them into a new Workplace Experience Index, which would be incorporated into the company's Long-Term Incentive plan for executive compensation.
"In the coming years, it will directly influence the remuneration of senior leaders, including the Board of Management," Fouquet wrote, adding that strengthening the company's culture and reinforcing its values would be a personal priority in the coming year.
ASML declined to comment.
ASML's lithography machines are a critical part of the semiconductor supply chain.
Bloomberg/Getty Images
The six questions include whether employees feel they can share their opinions without fear of retaliation and if they have confidence in ASML's senior leadership team.
Employees will also be polled on whether they have a clear understanding of their role, whether they think their teams are operating efficiently and are well organized, and whether they feel their direct manager shows they care about them as an individual.
It comes as ASML, the only firm on the planet capable of building the advanced EUV lithography machines critical for chipmakers like TSMC and Intel, attempts to slash bureaucracy with a sweeping org chart reorganization.
ASML announced in January that it could cut 1,700 jobs to reduce management layers and focus on engineering. Leaked documents previously reported by Business Insider show that these ongoing efforts have focused on reducing the number of managers at the company. The company later said it expected to cut fewer jobs than initially planned.
Going against tech's 'hardcore' trend
Major companies tying executive pay to employee satisfaction is uncommon, but not unheard of.
Companies like IBM and Aviva have previously included employee engagement in their compensation targets for top executives.
ASML's decision, however, runs counter to the cultural winds of Big Tech, which have seen some companies embark on relentless layoffs and push employees to work longer hours as part of a "hardcore" working shift.
Meta was an early, prominent leader of this push, with a series of layoffs that began in 2023 during Mark Zuckerberg's "year of efficiency" and, last year, cutting "low performers." CTO Andrew Bosworth at one point suggested that employees who disagreed with the company's direction should "consider working elsewhere."
Executives have since acknowledged internally that Meta went too far with its efficiency push, with Bosworth telling workers that morale at the company was almost the worst it has ever been.
Fouquet's memo to employees came days before ASML raised its 2026 sales forecast and pledged to accelerate production of its unique lithography machines as the AI boom fuels surging demand.
The company's machines are vital for producing the advanced semiconductors used to train and run AI models, and the rapid buildout of AI data centers has pushed ASML's shares up 45% this year.
One major prospective customer for the Dutch firm is Elon Musk, who is racing to build a massive semiconductor factory dubbed "Terafab" in Texas. Business Insider previously reported that Musk gave a virtual presentation to a private ASML employee conference in June to pitch Terafab, which is a joint project by Tesla and SpaceX.
The Duchess of Sussex said she was “deeply distressed” by allegations that a collection of child sexual abuse images had been found at her father’s former home.
The Duchess of Sussex said she was “deeply distressed” by allegations that a collection of child sexual abuse images had been found at her father’s former home.
The Kremlin has heavily invested in the promise that retreating Arctic sea ice opens up a once impassable route that is further from the reach of Ukrainian drone attacks or European naval interdiction of shadow fleet vessels. But officials are learning that cutting a path through ice isn't easy.
Ukrainian forces continue to report widespread disruptions to the Starlink satellite network, despite Donald Trump’s claim that Elon Musk had lifted restrictions on the service.
The slowdown, which has affected the key communications system used by Ukrainian troops, began last week after Trump and Starlink founder Musk publicly criticised Ukraine’s president, Volodymyr Zelenskyy, over continued strikes on Russian oil refineries.
Ukrainian forces continue to report widespread disruptions to the Starlink satellite network, despite Donald Trump’s claim that Elon Musk had lifted restrictions on the service.
The slowdown, which has affected the key communications system used by Ukrainian troops, began last week after Trump and Starlink founder Musk publicly criticised Ukraine’s president, Volodymyr Zelenskyy, over continued strikes on Russian oil refineries.
As riot police encircled Place de la République last week, lobbing teargas canisters to disperse demonstrators, the conductor Étienne Jarrier and his orchestra played on. They kept playing even after everyone else had disappeared and teargas was being fired into the central Paris square.
It was only when Jarrier noticed his musicians were being directly targeted that he ordered them to stop. “There were teargas canisters landing in the double bass and music stand cases, and starting fires the musicians had to stamp out,” he told the Guardian.
As riot police encircled Place de la République last week, lobbing teargas canisters to disperse demonstrators, the conductor Étienne Jarrier and his orchestra played on. They kept playing even after everyone else had disappeared and teargas was being fired into the central Paris square.
It was only when Jarrier noticed his musicians were being directly targeted that he ordered them to stop. “There were teargas canisters landing in the double bass and music stand cases, and starting fires the musicians had to stamp out,” he told the Guardian.
Show features live chat sessions with breeders, a podcast and updates on dogs’ progress from birth to weigh-ins
A 24-hour Finnish TV show dedicated entirely to the live progress of a dog and her six newborn puppies is drawing millions of viewers.
As well as a 24-hour webcam, Pentulive (Puppy Live) includes live evening chat sessions with the dogs’ breeder, a podcast and an instant notification service that updates followers on the puppies’ progress – from their birth to weigh-ins and first nail trims – for eight weeks.
In September, Canadian Prime Minister Mark Carney spoke of building a “unique alliance” between Canada and the European Union. Reports around the discussions went further, raising the possibility of some form of associate status for Canada, even though no such category currently exists in EU law. Carney himself was clear about what Ottawa was not […]
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