US tech sector faces AI‑driven stock selloff and sweeping layoffs

A wave of technology stock sales on U.S. exchanges has raised concerns that the rapid rise of artificial‑intelligence‑focused companies could be forming a bubble. Analysts point to historically high valuation metrics such as the Buffett Indicator and the S&P 500 price‑to‑sales ratio, warning that AI‑heavy firms may struggle to meet earnings expectations despite strong corporate profits and broader market optimism.

At the same time, AI is becoming the leading justification for layoffs across the U.S. technology industry. In May, roughly 40 % of announced job cuts were attributed to AI, according to Challenger, Gray & Christmas data. Companies disclosed sizeable reductions: Oracle trimmed its workforce by 21,000, Meta plans to lay off about 8,000 employees while shifting 7,000 to AI‑focused roles, and GitLab will cut about 350 jobs. Other firms such as Intuit, Cisco, and Cloudflare also announced layoffs ranging from 1,100 to several thousand, citing efficiency gains and a strategic shift toward AI‑driven operations.