US AI tech stocks suffered a sharp sell-off on Friday, wiping out more than $1 trillion in market value as investors questioned whether heavy spending on artificial intelligence — the build-out of data centres, chips and cloud capacity — will soon produce durable profits and cash flow.
The tech-heavy Nasdaq Composite fell 2.86% to close at 25,437.00, its weakest single session since June and roughly 8% below its recent high. The Nasdaq 100 dropped about 3.4%, its worst one-day fall since mid-June, moving the gauge closer to a 10% decline from its last record high — what traders call correction territory. The S&P 500 slid about 1.8% to 7,580.07, with its technology sector down more than 4.2%. The Dow Jones Industrial Average lost 572.25 points, or 1.09%, to 51,770.31.
Earnings that fuelled the sell-off
Pressure built after Thursday’s results from Amazon and Intel failed to calm markets that were already rattled by Alphabet’s worst day on record. Alphabet, the Google parent, missed third-quarter earnings and revenue expectations, reported negative free cash flow of about $9.07 billion, and shed roughly $500 billion in market value on Thursday — among the largest one-day value losses in market history. Its shares fell another 1.4% on Friday.
Amazon’s third-quarter earnings and revenue fell short of Wall Street expectations. The company posted negative free cash flow of $42.4 billion and kept a 2026 capital expenditures forecast of about $220 billion. Chief executive Andy Jassy told shareholders the firm still expects that 2026 outlay, mostly for Amazon Web Services (AWS), and expects to spend “meaningfully more” in 2027. Shares fell as much as 10% in Thursday’s after-hours trading before recovering; they finished Friday down a little more than 1%.
Intel slumped almost 29% in what data going back to the 1980s marked as its worst single day, after warning that fourth-quarter profits and sales would be weaker than expected and pointing to a slowdown in personal computers. Revenue in its client computing and physical artificial intelligence group fell 5% from a year earlier to $8.1 billion. Chief executive Lip-Bu Tan cited supply chain problems. The US government is Intel’s largest shareholder after taking a stake during the company’s turnaround; even after Friday’s drop, that stake’s value was still said to be up about 280% from when it was taken.
Chips, cloud and a rotation to defence
Chipmakers were hit hard. Advanced Micro Devices fell close to 11%; peers including ARM Holdings, Qualcomm and Marvell dropped around 10%. Nvidia declined about 4% and Broadcom about 5%. SanDisk (also styled Sandisk in some trading reports) fell about 13% even after beating fiscal first-quarter estimates and announcing an eight-for-one forward stock split. The Philadelphia semiconductor index sank 7.2%. Memory- and storage-linked funds also slid: a DRAM-focused ETF tumbled about 7% on Friday and was off about 20% in October.
So-called neocloud firms — companies building data-centre capacity for AI workloads — faced fresh scrutiny over debt. CoreWeave and Nebius each fell more than 10% on Friday; for October, CoreWeave was down about 37% and Nebius almost 35%. Reports citing people familiar with the matter said Blackstone told investors that Anthropic may not receive an investment-grade credit rating after its market debut, adding to caution around the AI theme.
Money moved toward more defensive areas. Walmart and Coca-Cola each rose more than 1%, and fellow Dow members Merck and Amgen also gained, limiting the blue-chip index’s decline. Globalt senior portfolio manager Keith Buchanan said the market tone had shifted toward harder questions about financing and who earns the economics of AI. Truist strategist Keith Lerner said Wall Street increasingly wants evidence that heavy investment will become lasting profits and cash flow — not only strong demand stories.
Friday was the last trading day of October. For the month the Nasdaq fell 5.3%, its steepest drop since March 2025; the S&P 500 declined 0.9% while the Dow rose 1.7%. Alphabet and Microsoft did not raise their capital-expenditure forecasts. Meta had reported negative free cash flow a week earlier for the first time since 2012. None of these large tech firms signalled that AI spending would slow.
Timeline: what has happened so far
- About a week before Friday’s close: Meta reported negative free cash flow for the first time since 2012.
- Mid-week (Alphabet results): Alphabet missed third-quarter earnings and revenue, posted negative free cash flow of about $9.07 billion, and later recorded its worst day on record with roughly $500 billion wiped from its market value.
- Thursday: Amazon and Intel reported results that unsettled investors; Amazon shares fell as much as 10% after hours; Intel’s weak outlook set up Friday’s collapse.
- Friday (final October session): More than $1 trillion in tech market value was erased; the Nasdaq Composite fell 2.86%; Intel plunged about 29%; the S&P 500 tech sector dropped more than 4.2%.
- October overall: The Nasdaq lost 5.3%; CoreWeave fell about 37% and Nebius almost 35%; an AI innovation ETF was down nearly 17%.
What investors are watching next
Selling intensified into month-end and ahead of next week’s midterm elections in the United States. Strategists are debating whether the shift from growth-heavy AI names into staples and healthcare will last. Yorkville partner Dan Ives argued that enterprise AI build-outs still look validated even as fundraising through bonds and equity sales has added pressure. For now, the market message is clearer scrutiny of cash flow while capital spending stays high.
Aasan alfaaz mein
America ke AI aur tech shares mein Friday ko bohot bari giraawat aayi, jismein $1 trillion se zyada ki value khatam hui. Nasdaq lagbhag 3% gir gaya aur Intel almost 29% niche chala gaya kyunke investors AI par kharche ka faida jaldi nahi dekh rahe. Amazon aur Alphabet ne bhi kamzor cash-flow figures diye, lekin spending band nahi ho rahi. Pakistan mein jo log US markets ya tech sector follow karte hain, unke liye yeh signal hai ke AI ka buzz ab zyada proof maang raha hai.
