The 2000–2002 collapse in technology-stock prices after the dot-com boom was the dot-com bust.
The dot-com bubble formed during the late 1990s as investors poured money into internet companies. Many businesses had little revenue or no profits, yet their valuations rose rapidly because investors expected online commerce and digital advertising to transform the economy. Companies often emphasized website traffic and future growth rather than established earnings.
The Nasdaq Composite reached its peak of 5,048.62 on March 10, 2000. As expectations changed, technology shares fell sharply. The index lost about 78% from its peak to its October 2002 low. Numerous internet startups failed, while some companies with durable business models eventually survived and became major firms.
The bust was not simply a rejection of the internet. It was a repricing of companies whose market values had become disconnected from cash flow and sustainable profits. The episode is commonly confused with the later 2008 financial crisis, but the dot-com bust centered on technology equity valuations rather than a housing-credit collapse.