Bad newsIntel Falls 28% and Nasdaq 2.9% as Doubts Grow Over AI Spending
Intel lost more than $130bn in value and Alphabet more than $500bn in two days after earnings raised questions about returns on AI spending. Five big tech firms have committed about $800bn for 2026, the BBC reports.
This story runs on the bad side only. The biggest stories of the day are told on both sides.
Intel shares fell 28% on Friday 30 October, wiping more than $130bn from its value, after the chipmaker reported weak results and said it would spend more on AI equipment. The Nasdaq fell about 2.9%, its biggest one-day drop since 5 June, Reuters reported. The BBC puts the close at 2.8% lower. The index is 7.8% below its record close of 6 October.
The bill behind the fall is large. Meta, Alphabet, Oracle, Amazon and Microsoft have committed to spend about $800bn between them in 2026, the BBC reports. Alphabet expects to spend up to $205bn this year, almost all of it on AI. Amazon has committed $220bn, mostly on data centres, network equipment and servers, and said it had spent more cash than it earned.
Who was hit
On Thursday Alphabet shares fell 12%, taking more than $500bn off its value. The company had said the AI summaries it now shows as the top answer to searches were affecting its core search advertising revenue. It slid another 1.4% on Friday. Intel’s finance chief, David Zinsner, said the company did not expect to bring in more cash than it spent this year and forecast lower-than-expected fourth-quarter revenue. He said the PC slowdown would last at least through the first half of next year.
Reuters says chip stocks fell sharply: Nvidia lost 4.2%, AMD 10.9% and the broader chips index 7.2%, leaving it down more than 15% for the month. Dell fell 10.8% and HP 9.6%. Reddit dropped 29% after weaker-than-expected daily user numbers and a warning that Google’s AI-driven search was hurting referral traffic. Roblox fell 18% as its daily active users declined.
What analysts say, and the other side of the ledger
Kathleen Brookes of the trading firm XTB said investors “have turned ruthless” and want payback on AI. Chris Low of FHN Financial told Reuters the big players were showing “growing pains” as they build out AI capacity. Those are market commentators’ readings, not company statements.
The fall comes after a good run. The Nasdaq is still up 7.8% over the past year, and Amazon is up nearly 8%. The sources do not say who bears the cost if the spending proves too large, and none of the companies quoted has said it will cut its AI plans.
