The 2000–2002 collapse in technology shares after the dot-com boom is known as the dot-com crash.
During the late 1990s, investors poured money into internet and technology companies, often valuing businesses on expected future growth rather than profits. The Nasdaq Composite reached 5,048.62 on March 10, 2000, before confidence in many heavily valued companies broke down.
The Nasdaq then fell roughly 78% from its peak to its October 2002 low. Numerous online businesses failed, venture funding contracted, and technology companies cut jobs and investment. The crash was not a single day's event; it unfolded over more than two years as earnings expectations and financing conditions changed.
The dot-com crash is often confused with the broader 2001 recession or with the later 2008 financial crisis. It centered especially on technology and internet equities, whereas the 2008 crisis was driven primarily by housing finance, bank leverage, and credit-market failures.