A bruising week for big technology shares ended with a broad sell-off on Friday, as disappointing earnings from Intel and Amazon deepened investor doubts about the cost of the artificial intelligence boom. The Nasdaq slid nearly 3 percent in the session, and chipmakers were hit especially hard. Readers following the rout can find background in our business news coverage of the earnings season.
Intel’s Guidance Shock
Intel was the day’s biggest casualty, plunging around 30 percent after the chipmaker forecast fourth-quarter revenue of $15 billion to $16 billion, well short of the roughly $17 billion analysts had expected. The weak outlook reignited questions about the company’s turnaround and its ability to compete in the AI era, and it dragged suppliers and rivals lower across the semiconductor complex.
Nvidia and Broadcom both fell sharply, while South Korea’s SK Hynix and Samsung Electronics dropped in Asian trading as the pessimism spread through the global chip supply chain. Analysts said the reaction showed how fragile sentiment has become after a long run-up in technology valuations.
Amazon and the AI Spending Question
Amazon fell more than 5 percent after missing third-quarter expectations and reporting a steep jump in negative free cash flow, a figure investors increasingly link to the company’s enormous data centre spending. A day earlier, Alphabet had suffered its worst session on record, plunging 13 percent after underwhelming results of its own.
Between them, Amazon, Alphabet, Microsoft and Meta spent more than $200 billion on capital investment in the third quarter alone. As market analysis of the sell-off points out, the market is no longer rewarding that spending automatically — it wants evidence of returns. Reddit also tumbled around 30 percent after weak guidance added to the risk-off mood.
Defensives Hold Up as Billions Are Wiped Out
Not everything fell. Energy and healthcare shares drew defensive buying, small-cap stocks outperformed, and volatility measures stayed comparatively contained, suggesting rotation rather than panic. Even so, one widely cited estimate put the value wiped from major indexes since their October peak at close to $3 trillion.
Attention now turns to Apple’s results after Monday’s close, the next major test of whether the earnings season can steady nerves. Until then, traders say, technology shares are likely to remain hostage to every hint about AI spending and returns.
The sell-off does not, by itself, end the AI investment story — but it marks a shift in the burden of proof. After years of rewarding ambition, investors are demanding that the industry’s record spending start paying for itself.
