AI Spending Fears Deepen Tech Stock Sell-Off

The Nasdaq fell 2% on October 30, extending a difficult stretch for technology shares as investors weighed the cost of the artificial intelligence build-out against its potential returns. Amazon shares closed down 1.9%, after falling further earlier in the session. The company’s results, released on October 29, showed third-quarter revenue of $201.9 billion and diluted earnings of $1.89 per share, both below analysts’ expectations.

Amazon’s net income was $20.7 billion, while free cash flow was negative $42.4 billion. Its cloud division, Amazon Web Services, grew revenue 39% to $46 billion. The company maintained its 2026 capital spending forecast of $220 billion, a level that added to investor concerns about the scale of its AI investment. Its fourth-quarter revenue outlook of $240 billion to $247 billion also left open the possibility of falling short of the $244.5 billion analysts expected.

Intel shares plunged as much as 29% on October 30 after the company’s fourth-quarter revenue forecast missed expectations. Intel cited softness in the computer market and production constraints. Its finance chief, David Zinsner, said the PC slowdown could continue through at least the first half of next year.

Reddit fell 24% despite beating earnings and revenue estimates. Chief executive Steve Huffman warned that Google’s AI-generated search summaries were reducing referrals to Reddit; the company said search referrals had fallen by an average of more than one million a week in October. Alphabet, Microsoft and other AI-related stocks also declined as investors continued to scrutinize the sector’s spending and prospects for returns.