The speculative bubble that peaked with the Nasdaq Composite at 5,048.62 in March 2000 was the dot-com bubble.
During the late 1990s, investors poured money into internet-related companies, including firms with little revenue or no profits. The growth of household internet access, enthusiasm about a new digital economy, and easy access to venture capital encouraged exceptionally high valuations. Companies often added “.com” to their names to signal an internet focus.
The Nasdaq Composite reached its closing peak of 5,048.62 on March 10, 2000. After that high, technology shares fell sharply as investors questioned business models and earnings prospects. The index lost roughly 78 percent of its value before reaching its trough in October 2002.
The crash did not mean the internet lacked economic importance. Several companies that survived or emerged from the period later became major businesses. The common mistake is to treat every technology company as part of the bubble in exactly the same way; the episode involved very different firms and business models.