US tech stocks tumble amid rising AI investment concerns
Shares of major tech firms fell sharply as investors reacted to soaring AI spending and mixed earnings.
Tech stocks fell for a second consecutive day as investors grew uneasy about the scale of artificial‑intelligence spending.
Intel led the decline, plummeting 28% on Friday, erasing more than $130 billion of market value. The chip maker said it will increase AI spending despite a slowdown in PC demand, and its finance chief David Zinsner warned that the company does not expect to generate more cash than it spends this year.
Alphabet, the parent of Google, saw its share price fall another 1.4% after a 12% drop on Thursday. The decline followed the company’s disclosure that AI‑generated search summaries were hurting core search advertising revenue, and it confirmed plans to spend up to $205 billion this year, almost entirely on AI.
Other names such as Reddit and Amazon also slipped. Amazon disclosed that its cash outflows now exceed cash generation, with spending six‑fold higher than three months earlier. The retailer has pledged $220 billion this year for AI data centres, network gear and servers, and its shares closed Friday down 1.4%.
The Nasdaq index of the largest US tech firms ended October with its worst monthly slide since March 2025, reflecting the broader market reaction.
Major tech players have collectively committed to $800 billion in AI spending by 2026, including Meta, Alphabet, Oracle, Amazon and Microsoft. Yet earnings have often missed analysts’ expectations, fueling fears of an AI bubble.
Alphabet’s market value fell sharply on Thursday, shedding more than $500 billion (£374 billion) after the AI‑search issue was revealed.
Overall, the combination of hefty AI investment plans and weaker-than‑expected earnings has put pressure on valuations across the sector.
