Nasdaq logs worst month since 2025 as AI spending fears hit tech

Technology shares in the United States fell for a second straight session on Friday, led by Intel and Alphabet, as investors questioned whether the industry's spending on artificial intelligence can produce returns. The BBC reported the falls; CNA reported that AI-linked shares in Asia faced another wave of selling on Monday.

Intel dropped 28% on Friday, losing more than $130bn in market value, after the chipmaker said it would raise AI spending even as demand for personal computers weakened. Chief financial officer David Zinsner said Intel did not expect to bring in more cash than it spent this year and forecast lower-than-expected fourth-quarter revenue. "Looking ahead, we see the PC slowdown continuing at least through the first half of next year," Zinsner said in the earnings report.

Alphabet fell 1.4% on Friday after a 12% plunge on Thursday, which wiped more than $500bn from its market value. The Google owner said AI-generated summaries at the top of search results were affecting revenue from its core search advertising business. It expects to spend up to $205bn this year on investments, almost all related to AI.

Amazon ended Friday down 1.4% after revealing it had spent more cash than it generated and that its spending had increased sixfold over three months. The company has committed $220bn this year to AI data centres, network equipment and servers. Reddit fell 29% after reporting weaker-than-expected daily users and warning that Google's AI-driven search was reducing referral traffic. Roblox fell 18% as daily active users dropped.

The tech-heavy Nasdaq closed 2.8% lower and ended October with its worst monthly slide since March 2025. Meta, Alphabet, Oracle, Amazon and Microsoft have committed to spending $800bn between them in 2026, the BBC reported.

Chris Low of FHN Financial told Reuters the companies were "showing some pretty significant growing pains as they aggressively pursue the AI build-out". "The thinking is that these signs suggest that the entire sector is going to slow down," he said.

Kathleen Brookes, research director at trading firm XTB, said investors had turned ruthless and were punishing any sign of disappointment in third-quarter earnings. "The AI trade has had a good run in recent years, but now investors want payback, and companies like Alphabet and Intel are in the crosshairs," she said.

The Nasdaq is still up 7.8% over the past year, while Amazon is up nearly 8% and Alphabet down 1.3%, the BBC reported. CNA reported that Amazon, Alphabet, Microsoft and Meta were on track to spend more than $700bn on capital investment this year, much of it on AI infrastructure, according to analyst estimates. CNA, citing Bloomberg, said 90% of software companies in the S&P 500 beat earnings expectations this season while just 70% topped revenue forecasts.

In Asia, CNA reported a mixed session on Monday as AI-linked shares faced another wave of selling. Japan's Kioxia fell more than 15% after a cautious outlook, South Korea's Samsung dropped more than 1%, SK hynix rose more than 1% and Taiwan's TSMC added nearly 2%. Tokyo, Sydney, Singapore and Taipei fell, while Hong Kong and Shanghai rose. Yonhap reported that Seoul stocks opened lower; CNA said Seoul was higher.

Apple, Advanced Micro Devices and Palantir were due to report later this week, CNA said. KuCoin reported that gold hit a one-year low as global markets slid.