AI jitters drive sharp technology stock sell-off

On October 30, a broad sell-off hit technology stocks, with the Nasdaq Composite down more than 3% during the session. Intel shares dropped nearly 30% after the chipmaker warned that supply constraints and a weaker PC market would weigh on its business. Amazon also fell, while Alphabet continued to slide after a steep loss the previous day.

Intel's sales for the third quarter totaled $16.5 billion, 20% higher than in the same period a year before, but it projected fourth-quarter sales of $15 billion to $16 billion, with earnings per share at 25 cents, down from 52 cents in the third quarter. The company said shortages of memory chips, whose prices have risen amid demand from AI data centers, were making computers more expensive and prompting manufacturers to order fewer of its PC chips.

Intel projects worldwide PC sales will fall around 12% this year and roughly another 10% in 2027. Revenue in its PC-chip division fell 9% from the previous quarter to $8.1 billion, and the company expects a decline of more than 20% in that division during the fourth quarter. Its data-center revenue, by contrast, rose nearly 80% year over year to $7.3 billion, though Intel said it could not meet all demand for server chips. A two-week halt in operations at its Israeli facility is expected to reduce fourth-quarter revenue by about $300 million.

The declines reflected broader investor doubts about whether massive spending on AI infrastructure will produce returns to match its cost. Amazon said it expects capital spending of about $220 billion in 2026, mostly for its cloud business, and plans to spend substantially more in 2027. Investors are also watching the debt used to fund data-center projects. The tech sell-off followed Alphabet’s roughly $500 billion loss in market value on October 29, while US Treasury yields fell on October 30.