The dot-com bubble burst in 2000, leading to a major crash in internet shares.
The bubble formed during the late 1990s as investors placed exceptionally high valuations on internet and technology companies. Many firms had promising ideas but little revenue, and some had not yet developed sustainable business models. Easy access to investment capital encouraged rapid expansion and speculative trading.
The Nasdaq Composite reached a peak of 5,048.62 on March 10, 2000. It then fell sharply as investors reassessed technology valuations, interest rates rose, and numerous companies failed to produce expected profits. The index eventually lost roughly 78% of its value from peak to trough.
The dot-com crash was different from the 2008 financial crisis, which centered on housing, mortgages, and credit. Some surviving internet companies later became major businesses, showing that the collapse of speculative valuations did not mean the internet itself lacked lasting economic importance.