The dot-com bubble was the U.S. market bubble that burst in 2000 after technology-company valuations soared during the late 1990s. Investors poured money into internet businesses, often valuing companies on expected future growth rather than profits, revenue, or established business models.
The Nasdaq Composite reached its peak on March 10, 2000. As enthusiasm faded, many companies failed to meet expectations, venture funding dried up, and technology shares plunged. The Nasdaq eventually lost about 78% of its value from its peak to its October 2002 low. The downturn caused widespread business closures and layoffs, although some stronger internet companies survived.
The term “dot-com” refers to the .com domain suffix associated with many internet businesses, not to every technology company. The crash also did not mean the internet itself lacked economic value. Online commerce and digital services later expanded enormously, but the bubble showed how rapidly speculative pricing can outrun sustainable earnings.