The dot-com crash describes the U.S. technology-stock collapse that followed the dot-com boom.
During the late 1990s, investors placed enormous valuations on internet companies, including many businesses with little revenue or no profits. The Nasdaq Composite rose from about 751 in August 1995 to 5,048.62 on March 10, 2000.
After that peak, expectations changed, interest rates rose, and investors began demanding stronger business results. The Nasdaq fell about 78% from its March 2000 high to its October 2002 low. Many internet companies failed, while surviving firms faced layoffs and reduced investment.
The crash did not mean that the internet itself was unsuccessful. Companies such as Amazon and eBay survived and later became major businesses. The central mistake was often confusing rapid technological adoption with justified valuations for every newly listed company.