The 2000–2002 market collapse that followed the bursting of a technology-company investment bubble was the dot-com crash.
The bubble centered on internet-related companies and expanded rapidly in the late 1990s. Investors often valued businesses on expected future growth rather than profits, while easy access to capital and widespread enthusiasm for the commercial internet pushed many share prices to extraordinary levels.
The Nasdaq Composite reached 5,048.62 intraday on March 10, 2000. It then declined sharply as investors questioned unrealistic valuations and many companies failed to produce sustainable revenue. The downturn affected technology shares especially severely and continued until the index reached a major low in October 2002.
The crash did not show that the internet lacked economic importance. Companies such as Amazon survived and later became much larger, while many other ventures disappeared. The dot-com crash is also distinct from the 2008 financial crisis: the former was primarily an equity-valuation collapse, whereas the latter involved housing finance, banks, and global credit markets.