US tech stocks see sharp falls over AI cost fears
US tech stocks slid sharply on October 30, 2026, led by Intel and Amazon as investors worried about soaring artificial intelligence infrastructure costs and weak earnings.
Stock photo for illustration only, not from the actual event
- US tech stocks plunged heavily amid growing concerns over surging AI investment costs
- Intel shares dropped by up to 30% with weaker-than-expected fourth-quarter revenue guidance
- Alphabet lost over $500bn in value after AI summaries impacted its core search ad revenue
- Amazon and Reddit saw steep stock drops driven by lower user metrics and rising expenditures
US stock markets faced heavy sell-offs on Friday, October 30, 2026, with the tech-heavy Nasdaq opening down 2.5% to its lowest level in over two months amid intensifying anxieties regarding the astronomical expenses required to build out artificial intelligence systems.
The fallout hit multiple major technology firms hard, most notably Intel. The chip maker saw its shares plummet by as much as 30% in early Friday trading after warning of a softer computer market alongside plans to ramp up AI spending. David Zinsner, Intel's chief financial officer, disclosed on Thursday that the firm did not expect to bring in more cash than it spent this year.
Stock photo for illustration only, not from the actual event
Beyond Intel, Amazon shares dropped as much as 6% before recovering slightly to trade down about 1.6% after reporting late Thursday that its spending had increased sixfold over a three-month span. Meanwhile, Google parent company Alphabet saw its market value plunge by over $500 billion on Thursday after revealing that its proprietary AI summaries were negatively impacting its core search advertising revenue streams.
"showing some pretty significant growing pains as they aggressively pursue the AI build-out"
Chris Low, FHN Financial
Social media and gaming platforms were equally battered. Reddit shares tumbled 26% after the platform posted weaker-than-expected daily user figures and warned that Google's expanding AI-driven search was eating into referral traffic. Online gaming platform Roblox also witnessed its stock drop by nearly 20% as its daily active user numbers declined.
This widespread tech stock sell-off highlights a critical turning point where Wall Street is beginning to demand concrete returns on the hundreds of billions of dollars poured into generative AI. As major tech giants absorb massive capital expenditures for data centers, advanced silicon, and immense energy needs without immediate revenue offsets, the market is reassessing whether the sector's hyper-growth phase is hitting a plateau.
Chris Low, chief economist at investment management firm FHN Financial, told Reuters that the bulk of market activity was a direct reaction to top-tier players like Amazon and Google showing significant growing pains while aggressively pursuing artificial intelligence expansion, leading to broader sector-wide slowdown concerns.
Source: BBC Business
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