The technology-stock bubble whose collapse caused the Nasdaq to lose about 78% from peak to trough was the dot-com bubble.
The bubble grew during the late 1990s as investors poured money into internet companies. Many firms had promising ideas but little revenue, no profits, or business models that depended on continual access to new investment. The phrase “dot-com” referred to the internet domain suffix used by many of these companies.
The Nasdaq Composite reached a peak of 5,048.62 on March 10, 2000. It then declined as investors reassessed valuations, interest rates rose, and numerous internet companies failed. By October 2002, the index had fallen roughly 78% from its peak.
The crash did not mean that the internet itself lacked economic value. Companies such as Amazon and eBay survived and later became major businesses, while many weaker firms disappeared. The common mistake is to treat every technology company as part of the same failed business model.