Intel, Amazon, Reddit and other technology stocks fell sharply on Friday in the United States after quarterly earnings reports renewed investor concern about heavy spending on artificial intelligence.2,3
The sell-off marked a second day of declines for tech shares, with investors weighing disappointing revenue and large AI investments, and analysts said there were questions about the payout from the huge investments in AI.2,3
The Nasdaq index of the largest tech firms listed in the United States sank on Friday, with the reports differing on the size of the drop. The New York Post put the decline at 3% and said the index was on track for a monthly decline, while the BBC said it sank more than 3.5%.2,3
The BBC said shares in Intel plummeted by as much as 30% on Friday and were on track to lose more than $130 billion in value as trading continued. CNBC described the move as Intel's worst day in more than 50 years, wiping $12 billion off the government's stake.1,3
The chip maker said it planned to increase spending on AI despite weaker demand for computers, a major source of demand for its micro-processors. On Thursday, finance chief David Zinsner said the firm did not expect to bring in more cash than it spent this year and forecast lower-than-expected revenue for its fourth quarter.3
"Looking ahead, we see the PC slowdown continuing at least through the first half of next year," he said in the chip maker's third quarter earnings report. He said in the earnings call that the firm had significantly ramped up investment in equipment in the third quarter and expected that to be "even more significant" in the following three months.3
Amazon shares also fell after the company reported earnings on Thursday, with the reports differing on the size of the decline during Friday trading. The New York Post said Amazon fell 2.1% Friday after the company reported revenue of $201.9 billion and net income of $20.7 billion. The BBC said Amazon shares fell as far as 6% in overnight trading and were still down about 1.6% in Friday trading.2,3
The BBC said Amazon's reported earnings fell short of investors' expectations, that the company had spent more cash than it was making, and that spending had increased six-fold over the span of three months. The company has committed to spending $220 billion this year, putting the money toward investments such as AI data centers, network equipment and servers.3
The declines followed a sharp fall for Google owner Alphabet in the previous day's trading. The BBC said Alphabet's stock market value plunged by more than $500 billion, or 374 billion pounds, on Thursday after it revealed that the AI summaries it now provides as the top answer to search queries were affecting its core search advertising revenue. Alphabet stock continued to fall in early trading Friday, down 2.2% after Thursday's slide of more than 12%.3
Alphabet expects to spend up to $205 billion this year on investments, almost entirely related to AI, the BBC said. More broadly, Meta, Alphabet, Oracle, Amazon and Microsoft have committed to spending $800.6 billion between them in 2026, as major technology companies ramp up artificial intelligence spending.3
Reddit stock was down by 26%, after the social media platform revealed weaker-than-expected daily user figures and warned that Google's growing AI-driven search was hurting referral traffic. Stock in online game platform Roblox also fell, down by nearly 20%, as its daily active user numbers dropped.3
Tech and AI stocks have had choppy trading sessions for weeks as investors move between fears of an AI bubble and optimism around the new technology, with concerns growing during the third-quarter earnings season as companies reveal disappointing revenue and huge spending. Chris Low, from investment management firm FHN Financial, told Reuters the bulk of what was happening in the stock market was in reaction to some of the biggest tech players such as Amazon and Google. Several major tech firms have reported earnings this week, including Microsoft.2,3
