The 2000–2002 collapse in technology-stock valuations after the Nasdaq Composite peaked is called the dot-com crash. The Nasdaq reached 5,048.62 on March 10, 2000, after years of enthusiasm about internet companies and rapid speculative buying.
Many newly listed businesses had little revenue, no profits, or untested business models. Investors nevertheless assigned them enormous valuations, encouraged by falling technology costs, widespread internet adoption, and a belief that traditional measures of value no longer applied. When expectations weakened, selling spread across the sector.
The Nasdaq fell about 78% from its peak to its October 2002 low. Some internet companies disappeared, while survivors such as Amazon eventually became major firms. The crash did not mean that the internet itself failed; it marked the collapse of excessive valuations surrounding many early online businesses.