US tech stocks see sharp falls as AI spending nears $1tn — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Intel shares plummeted 28% on Friday, erasing more than $130bn in value, after the chipmaker forecast fourth-quarter revenue below expectations, said it would not take in more cash than it spent this year and still planned to increase AI spending despite a PC slowdown.
- Alphabet fell another 1.4% on Friday after Thursday’s 12% plunge cut more than $500bn from its market value; AI summaries shown as the top answer to search queries were affecting core search-ad revenue, while it expected to spend up to $205bn this year, almost entirely on AI.
- Meta, Alphabet, Oracle, Amazon and Microsoft together committed $800bn to AI spending in 2026, the investment total behind investor demands for measurable returns.
- Amazon said spending had increased sixfold over three months and exceeded the cash it generated, while committing $220bn this year to investments including AI data centres, network equipment and servers; its shares ended Friday 1.4% lower.
- Reddit plunged 29% after reporting weaker-than-expected daily user figures and warning that Google’s growing AI-driven search was hurting referral traffic to the platform.
- Nasdaq closed 2.8% lower and posted its worst monthly slide since March 2025, yet remained 7.8% higher over the past year; Amazon was up nearly 8%, while Alphabet was down 1.3%.
- Chris Low of FHN Financial said Amazon and Google were showing “significant growing pains” from their aggressive AI build-out; XTB research director Kathleen Brookes said investors now want payback and are punishing disappointing third-quarter earnings.
Why it matters: Intel’s $130bn market-value loss and Alphabet’s $500bn decline show that investors are punishing AI outlays without near-term cash returns. With five firms alone pledging $800bn for 2026 and Amazon spending $220bn this year, tech companies must prove the build-out can earn returns despite weaker search-ad revenue, PC demand and referral traffic.
Ask SkimNews
