The sharp drop of major U.S. technology companies has reached European stock markets this Friday, after a session of significant losses on Wall Street. Doubts about the profitability of investments in artificial intelligence, the debt burden of some companies, and the possibility of new regulatory restrictions in the United States have triggered a wave of selling that has also reached the Spanish market.
The Nasdaq, one of the main U.S. technology indices, fell 5.5% on Thursday, while the European index STOXX 600 was down around 1% during Friday morning. The IBEX 35 was also trading in negative territory, although the composition of the Spanish market, with a significant weight of banks, utilities, and other large companies, means that its direct exposure to technology is different.
The drop does not imply that all Spanish companies will suffer losses or that savers necessarily have to assume harm. However, there are several channels through which stock market turmoil can affect investments, business plans, and financing conditions in Spain.
How the drop in technology affects Spanish investment funds
One of the most immediate effects can occur in the investment funds and pension plans with exposure to the U.S. stock market, especially those that invest in large technology companies.
Products that replicate indexes such as the Nasdaq 100 or the S&P 500 include companies whose stock market value depends, to varying degrees, on expectations about the growth of artificial intelligence and other digital businesses.
When these shares fall, the net asset value of the funds that include them can also decrease. The impact on each saver will depend on the weight of those companies in their portfolio, on the rest of the investments, and on the movement of the exchange rate when the assets are denominated in dollars.
Not all funds behave the same way. Products diversified across different sectors and markets may have less exposure than those concentrated in technology.
Which Spanish companies may be affected
The consequences are not limited either to publicly traded companies. Spanish companies dedicated to the development of computer programs, data centers, telecommunications, or services related to artificial intelligence may be affected by the investment decisions of their clients.
If the large international tech companies review their budgets, delay projects, or reduce contracting with suppliers, the companies that work for them may notice those changes in their activity.
Spain participates in the development of digital infrastructures and data centers, a sector that requires significant investments in electricity, construction, computer equipment, and communications networks.
The stock market decline, by itself, does not mean the cancellation of these projects. To know its real impact, it will be necessary to check whether companies modify their investment commitments and their contracts.
The impact on financing and new investments
Another possible consequence affects the financing conditions of companies.
Technology companies that need to raise capital to expand their businesses may find greater difficulties if investors demand higher returns or reduce their willingness to finance riskier projects.
This situation can affect especially start-ups and those that still depend on new rounds of financing to develop their products.
Meanwhile, established companies, with recurring revenues and less dependence on external financing, may find themselves in a different position. The effect will depend on the financial situation of each company and on the duration of the turbulence.
Why tech companies are falling
Sales have been concentrated especially in companies related to artificial intelligence and semiconductors, after months of heavy investment and high growth expectations.
Investors are reassessing how long they will need these companies to recover the money allocated to data centers, processors, and new technological infrastructures.
To these doubts has been added the new U.S. political scenario after the legislative elections, with the possibility that Congress will push for greater oversight of certain investments and activities linked to artificial intelligence.
On Thursday, European tech companies also suffered sharp pullbacks. The sector fell by 3.2%, while semiconductor manufacturers and industrial equipment linked to these activities were among the hardest-hit values.
What can happen with the IBEX 35 and savings in Spain
The performance of the IBEX 35 does not have to mirror the declines of the Nasdaq. The Spanish stock market has a different sector mix, and its major companies depend on factors such as interest rates, consumption, energy, and international economic activity.
Nonetheless, a broad decline in the stock markets can affect companies in different sectors when investors reduce their positions in equities.
For small savers, the main difference lies in the type of product contracted. Having money in a bank account or in a deposit does not amount to investing in an equity fund, whose value fluctuates with the markets.
The evolution of the next trading sessions will make it possible to check whether the selling is concentrated in tech companies or if it continues to spread to other sectors. For now, the stock market drop shows a revision of expectations about artificial intelligence, but it does not allow specific losses to be anticipated for Spanish companies or savers.