US tech stocks slide as AI spending costs raise investor doubts
Nasdaq 100 fell 3% as Amazon and Intel earnings sparked concerns about returns on AI spending; Intel shares plunged after weak guidance.
What you need to know
US tech stocks fell sharply on Friday, with the Nasdaq 100 down 3% in early trading, as quarterly earnings from Amazon and Intel intensified doubts over whether massive AI spending will deliver returns. Intel shares plunged up to 30% after a weak outlook, while Amazon dropped 6% before paring losses.
- Nasdaq 100 fell 3% in early trading, on track for its worst one-day drop since mid-June.
- Intel shares fell as much as 30% after the chipmaker forecast lower-than-expected fourth-quarter revenue.
- Amazon shares dropped as much as 6% after earnings fell short of investor expectations.
- The sell-off follows a more than $500 billion market value decline for Alphabet on Thursday.
Nasdaq slides as AI spending doubts mount
US tech stocks fell sharply on Friday, with the Nasdaq 100 down 3% in early trading and on course for its worst one-day drop since mid-June. The broader S&P 500 fell more than 1.2%, and its tech sector tumbled over 3.5%.
The declines followed quarterly earnings from Amazon and Intel that investors found unconvincing. Amazon reported that its AI-related spending continued at a faster clip than expected while growth in its core online shopping business slowed. Intel warned of a weaker computer market even as it plans to increase AI spending.
Intel and Amazon lead losses
Intel shares plunged as much as 30% after the chipmaker forecast lower-than-expected fourth-quarter revenue. Finance chief David Zinsner said the company did not expect to bring in more cash than it spent this year and that the PC slowdown would continue at least through the first half of next year.
Amazon shares fell as much as 6% before recovering to trade about 1.6% lower. CEO Andy Jassy told shareholders to expect approximately $220 billion in 2026 cash capital expenditures, with meaningfully more spending in 2027. Other tech stocks also fell, including Reddit, down 26%, and Roblox, down nearly 20%.
Why did Intel shares plunge on Friday?
Intel shares plunged as much as 30% after the chipmaker forecast lower-than-expected fourth-quarter revenue and warned of a weaker PC market, while planning to increase spending on AI.
Sources & context
- US tech stocks see sharp falls over AI cost fears ↗BBC
- Tech stocks set to wipe out more than $1 trillion as concerns deepen about the AI boom ↗NBC News
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