US technology stocks fell for a second consecutive day on Friday 30 October, with the sell-off knocking nearly $1tn in value off the tech-heavy Nasdaq exchange over the course of a week and erasing about $2tn in a month, according to The Guardian. The Nasdaq closed 2.8% lower on the day, ending October with its worst monthly slide since March 2025, BBC News reported. The trigger was not a collapse in demand but a run of earnings that failed to satisfy investors already anxious about the scale of capital spending being directed at artificial intelligence.
The losses were concentrated in companies whose results or guidance raised questions about near-term returns. Intel shed more than $130bn in market value as its shares plummeted 28% on Friday, BBC News reported, after the chipmaker said it planned to increase AI spending despite weaker demand for computers and forecast lower-than-expected fourth-quarter revenue. Alphabet fell a further 1.4% following a 12% plunge on Thursday that took more than $500bn off its market value, after it disclosed that AI summaries at the top of search results were affecting core search advertising revenue and that it expects to spend up to $205bn this year on investments, almost entirely AI-related.
The spending commitments behind the anxiety
The scale of the commitments is central to the story. Meta, Alphabet, Oracle, Amazon and Microsoft have committed to spending $800bn between them in 2026, according to BBC News. Amazon alone has committed $220bn this year, directed at AI data centres, network equipment and servers, and disclosed that it had spent more cash than it was making, with spending up six-fold over three months. The Guardian reported that hyperscalers Meta Platforms, Alphabet and Amazon raised spending forecasts further as they race to expand AI infrastructure. The market reaction extended beyond the largest platforms. Reddit stock plunged 29% after the social media platform reported weaker-than-expected daily user figures and warned that Google's growing AI-driven search was hurting referral traffic, BBC News reported. Roblox fell 18% as daily active user numbers dropped. Among semiconductor firms, The Straits Times reported Nvidia shedding 3.2%, Micron down 5.7% and AMD tumbling 10.3%. Nvidia's 3.1% decline was the heaviest force pulling the S&P 500 downward, according to The Guardian, which noted the index fell by more than 1% on Friday and was on track to erase its gain for October despite setting an all-time high during the same month. The sources differ in emphasis on Intel's results. The Guardian reported that the chipmaker posted a stronger profit for the latest quarter than analysts expected but gave guidance for the final three months that fell far short of expectations. BBC News focused on Intel finance chief David Zinsner's comment that the firm did not expect to bring in more cash than it spent this year, and his remark that "Looking ahead, we see the PC slowdown continuing at least through the first half of next year." The Straits Times reported that Intel acknowledged the AI boom was slowing its key personal computer market by driving up the price of memory chips.What the sell-off is and is not saying
The evidence points to a repricing of AI investment rather than a demand shock. Chris Low of FHN Financial told Reuters, as reported by BBC News, that the largest tech players were "showing some pretty significant growing pains as they aggressively pursue the AI build-out", adding that "The thinking is that these signs suggest that the entire sector is going to slow down." Kathleen Brookes, research director at XTB, said investors had "turned ruthless, punishing any signs of disappointment in [third quarter] earnings", and that "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." Context matters for calibration. BBC News noted that despite the falls, many of these companies remain well above their levels a year ago: the Nasdaq is up 7.8% over the last year, Amazon is up nearly 8% over 12 months, and Alphabet is down 1.3%. The Straits Times reported that the steep losses reversed optimism earlier in the week prompted by AI giant Anthropic's IPO filing, and that South Korea's Kospi closed the week down 3.5% while Tokyo finished 2% lower. London's tech-light FTSE 100 edged higher, lifted by strong earnings from AstraZeneca and BP.Why It Matters
For operators and investors, the signal is that the market is now pricing the return on AI capital spending, not the ambition behind it. Companies in the chip, data-centre and power-supply chains that have benefited from hyperscaler build-out are exposed to any change in spending guidance. The sell-off also shows how quickly AI-driven product changes can feed back into established revenue lines, as Alphabet's search advertising experience demonstrates.Commercial Impact
Procurement and supply agreements tied to data-centre construction, server capacity and networking equipment are the most directly affected. A sustained pause in hyperscaler commitments would flow through to semiconductor order books and the power and cooling suppliers that support new facilities. The Guardian noted that chip companies and other AI datacentre winners have come under pressure on concerns that high interest rates may slow the further build-out of data centres, a financing channel worth watching alongside earnings guidance.Risks and Unknowns
The central unknown is whether spending guidance holds. Brookes told BBC News that if AI stocks continue to struggle in the coming days, "it could suggest the AI trade is past its peak, and investors will be looking for a new theme to drive markets." She also noted that November is typically a strong month for stocks. The Straits Times reported that focus is turning to the 3 November US midterm elections and their impact on the final two years of Donald Trump's presidency. Whether the current quarter's disappointment reflects temporary growing pains or a durable reset in AI valuations remains unresolved, and the sources do not establish which.FY Outlook
The next test is guidance rather than backward-looking results. Watch whether Meta, Alphabet, Amazon and Microsoft hold or raise their 2026 spending commitments, and whether Intel's PC slowdown extends beyond the first half of next year as its finance chief forecast. A stabilisation in November would support the view that this is a valuation correction within an intact build-out; a further leg down would strengthen the case that the AI trade has peaked. For now, the evidence supports a story about returns and spending discipline, not about demand disappearing.Sources and References
- BBC News (bbc.co.uk)
- The Guardian (theguardian.com)
- The Straits Times (straitstimes.com)
