For years, artificial intelligence stocks powered market gains, with companies like Nvidia and Microsoft leading the charge. Now, fears about AI's economic impact are triggering sharp selloffs, turning the sector from market savior to source of volatility. The shift has rattled investors who bet heavily on AI-driven growth.

This reversal marks a dramatic change in sentiment. Just months ago, AI enthusiasm sent valuations soaring as companies raced to adopt the technology. Now, concerns about overvaluation, regulatory scrutiny, and AI's broader economic effects are weighing on stocks. The selloff has spread beyond tech, affecting sectors that benefited from AI-driven investment.

The market's about-face underscores how quickly investor sentiment can shift in technology sectors. With AI stocks retreating, portfolio managers are reassessing exposure to the sector. The volatility highlights the risks of crowding into a single theme, even one as transformative as artificial intelligence.