Wall Street stocks fell sharply Friday as disappointing earnings from Amazon and Intel triggered another wave of selling in technology shares. Investors are growing increasingly concerned about the enormous costs of artificial intelligence and whether companies can generate enough profits to justify their spending.
The technology-heavy Nasdaq Composite dropped 2.7% in midday trading, while the S&P 500 declined 1.6%. The Dow Jones Industrial Average fell approximately 384 points, or 0.7%, as investors shifted money toward traditionally defensive sectors, including healthcare and consumer staples.
The declines extended a difficult stretch for technology stocks, with some of the biggest names in artificial intelligence suffering substantial losses.
Intel Crashes as Amazon Raises Concerns About AI Spending
Intel was among Friday’s hardest-hit stocks, plunging approximately 29% after issuing a disappointing fourth-quarter forecast. The chipmaker warned of continued pressure in the personal computer market, raising concerns about its turnaround efforts and the cost of expanding its manufacturing operations.
Intel’s client computing and physical artificial intelligence business reported revenue of $8.1 billion, down 5% from a year earlier. The weak performance raised questions about demand for traditional processors and the company’s ability to balance heavy investment with near-term profitability.
Amazon shares also declined approximately 2% after the e-commerce and cloud computing giant reported quarterly results that fell short of Wall Street expectations.
Although Amazon’s third-quarter revenue increased 12% to $201.9 billion, investors focused on the company’s deteriorating free cash flow. Amazon reported negative free cash flow of $42.4 billion over the trailing 12 months, compared with positive free cash flow of $14.8 billion a year earlier.
Much of that change reflects enormous investments in artificial intelligence infrastructure, including data centers and computing equipment. Amazon maintained its 2026 capital spending forecast of approximately $220 billion, reinforcing concerns about how quickly those investments will produce meaningful returns.
The selloff came despite strong growth in Amazon Web Services, where third-quarter revenue increased 39% to $46 billion.
Nvidia, AMD and Other Chipmakers Slide
Selling spread across the semiconductor industry as investors reassessed the outlook for companies benefiting from the artificial intelligence boom.
Advanced Micro Devices fell approximately 11%, while Nvidia declined 4% and Broadcom lost 5%. Data storage company Sandisk dropped roughly 12%, despite reporting better-than-expected quarterly results and announcing an eight-for-one stock split.
The widespread declines suggest investors are becoming less willing to overlook potential risks simply because a company is associated with artificial intelligence.
For much of the past several years, AI-related stocks have benefited from expectations that demand for advanced computing infrastructure would continue expanding rapidly. That optimism supported rising valuations across semiconductor companies, cloud providers and data center operators.
Recent earnings reports have complicated that outlook as investors question the costs of maintaining rapid growth.
Google’s Historic Decline Added to the Pressure
Friday’s selling followed a particularly difficult Thursday for Alphabet, Google’s parent company.
Alphabet shares plunged approximately 12.6% after its quarterly earnings disappointed investors and the company reported negative free cash flow of $9.07 billion.
The decline marked the company’s worst trading session in more than two decades and helped push the Nasdaq down more than 1% Thursday.
Investors have become increasingly sensitive to the cash required to build artificial intelligence infrastructure. Companies including Alphabet, Microsoft and Amazon are committing enormous sums to expand computing capacity, even as questions remain about the timing and size of future returns.
The concern extends beyond the technology giants themselves.
Cloud infrastructure providers that finance expensive AI data centers through borrowing are also experiencing pressure. CoreWeave has lost more than 37% in October, while Nebius is heading toward a monthly decline of approximately 33%.
Rising borrowing costs and uncertainty about future demand could make it more difficult for heavily indebted companies to finance additional expansion.
Investors Move Into Healthcare and Consumer Staples
While technology stocks suffered heavy losses Friday, several traditionally defensive companies attracted buyers.
Walmart and Coca-Cola each gained nearly 2%, while Procter & Gamble advanced more than 1%. Healthcare companies also performed relatively well, with Merck and Amgen rising approximately 2%.
These companies generally benefit from more predictable consumer demand and established cash flows, making them attractive during periods of market uncertainty.
The shift suggests investors are becoming more selective about where they put their money. Businesses with consistent earnings and established profitability are attracting interest as some high-growth technology companies face increasing scrutiny.
That rotation could become particularly important if the technology selloff continues into November.
October Has Been a Difficult Month for AI Investors
Friday’s decline adds to substantial losses across several artificial intelligence investment categories.
The Roundhill Memory ETF, which holds companies tied to AI-related memory and storage demand, has declined approximately 20% during October. The iShares A.I. Innovation and Tech Active ETF is down roughly 17% for the month.
The broader Nasdaq is heading toward a monthly decline of approximately 5%, while the S&P 500 is on pace for a smaller loss of less than 1%. The Dow, supported by companies outside the technology sector, is positioned to gain approximately 2%.
The difference highlights how sharply market performance has diverged between technology companies and more traditional businesses.
It also underscores the risks associated with concentrating investments in a small group of high-growth stocks. Investors with substantial exposure to technology-heavy index funds may experience greater volatility than those holding more diversified portfolios.
What Investors Should Watch Next
The biggest question heading into November is whether the technology selloff represents a temporary correction or the beginning of a more sustained reassessment of AI-related valuations.
Investors will be watching upcoming corporate earnings, especially management commentary about capital spending, profit margins and cash generation. Companies that can demonstrate meaningful returns from AI investments could be better positioned to regain investor confidence.
The semiconductor industry will also remain in focus. Any indication that demand for computing equipment is slowing, or that customers are delaying purchases because of rising costs, could create additional pressure.
For investors approaching retirement or relying on portfolio income, Friday’s market action is another reminder of the importance of diversification. Technology companies remain important drivers of economic growth, but their valuations can become vulnerable when expectations exceed near-term financial performance.
The Bottom Line
Wall Street’s latest selloff reflects a growing concern about the financial cost of the artificial intelligence boom.
Amazon, Intel and Alphabet have all faced significant investor backlash following their earnings reports, while weakness has spread across semiconductor companies and AI infrastructure providers.
The technology sector still offers substantial long-term growth potential. However, investors are demanding clearer evidence that the billions being invested in artificial intelligence will eventually translate into sustainable profits and stronger cash flow.
With the Nasdaq heading toward a difficult end to October, that question could determine whether technology stocks stabilize or face additional selling pressure in November.
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