Big Tech AI Spending Returns and Investor Pressure
US technology stocks fell sharply as investors questioned whether enormous AI infrastructure spending would generate sufficient returns, with Intel down nearly 30% and Alphabet losing more than $500 billion in market value. Amazon also declined after reporting weaker-than-expected results and spending more cash than it generated, while the Nasdaq fell roughly 3% to 3.5% according to the reporting period.
The selloff shows that investors are applying greater scrutiny to the financial returns and cash generation of large-scale AI infrastructure investments.
US stocks have continued to slide as concerns continue to intensify over the increasing costs of the artificial intelligence (AI) build out.
Shares in Intel continued their overnight slide into early trading on Friday, falling as much as 30% after the chip maker warned of a weaker computer market even as it plans to increase spending on AI.
Amazon shares fell as far as 6% before recovering after its reported earnings on Thursday evening fell short of investors' expectations.
The tech-heavy Nasdaq stock exchange opened on Friday at its lowest level in more than two months, down 2.5%, as other tech stocks including Reddit and Roblox continued to fall.
The losses follow the value of Google owner Alphabet plunging by more than $500bn on Thursday after it revealed its own AI summaries were affecting its core search advertising revenue.
Alphabet stock continued to fall in early trading, down 1% after Thursday's massive slide.
#Alphabet#Intel#Amazon#Meta#Microsoft#Oracle#Reddit#Nvidia#Nasdaq