AI Spending Fears Spark Deep Tech Selloff
The Nasdaq fell 2.9% Friday to conclude Wall Street's worst day since June, dragged down by a 30% collapse in Intel and mounting losses across mega-cap tech. The rout closed out $1.2T in monthly market losses as investors penalized companies spending billions on artificial intelligence without immediate profit.
Wall Street has revoked Big Tech's blank check for AI infrastructure — demanding immediate cash returns after $1.2T in market value vanished in a single month.
Background Tech giants have poured hundreds of billions of dollars into data centers and specialized chips, driving the broader stock market to record highs on promises of generative AI productivity. That spending binge faces intense scrutiny as ballooning capital budgets compress free cash flow while core cloud and advertising revenue growth moderates.
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Intel shares plummeted 30% Friday in their steepest single-day decline since 1974, after fourth-quarter revenue guidance missed estimates and signaled chronic manufacturing bottlenecks in server silicon.
Amazon disclosed $42.4B in negative free cash flow over the trailing 12 months after allocating $94.8B to capital expenditures, deepening investor anxiety over debt-fueled artificial intelligence investments.
The Nasdaq 100 erased over $1.2T in market value during October, ending a 5-month rally as capital rotated toward defensive industrial and energy equities.
Alphabet dropped another 1.5% Friday following Thursday's record 12% plunge, cementing half a trillion dollars in lost market capitalization after reporting rising AI infrastructure depreciation.
Timeline
Today · Fri Oct 30
Intel tumbled 30% in its steepest single-day decline in 52 years after forecasting fourth-quarter revenue well below Wall Street estimates.
The Nasdaq composite fell 2.9% Friday, sealing Wall Street's worst single-day drop since June as tech giants logged $1.2T in monthly market losses.
Watch Nvidia third-quarter earnings report November 18: if data-center chip orders decelerate as hyperscalers curb spending, the selloff spreads from cloud providers to hardware suppliers worldwide.
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