US Stocks Plunge as AI Spending Concerns Hit Intel and Amazon Shares

US indices plummeted as poor quarterly results from Intel and Amazon triggered investor anxiety regarding high spending on artificial intelligence and the delay in achieving profitable returns for technology-heavy companies.

US Markets Tumble Amid AI Investment Concerns

US stocks ended sharply lower on Friday, with the Nasdaq Composite recording its biggest one-day percentage fall since June 5, as disappointing quarterly results from Intel and Amazon intensified concerns over the massive spending by technology companies on artificial intelligence and the time needed to generate returns, according to a Reuters report. The Nasdaq fell 2.86 per cent to close at 25,437.00, while the S&P 500 declined 1.82 per cent to 7,580.07. The Dow Jones Industrial Average dropped 1.09 per cent to 51,770.31. The technology-heavy Nasdaq has fallen 7.8 per cent from its record closing high reached on October 6.

Impact on Semiconductor and Tech Stocks

The selloff followed quarterly results released by Intel and Amazon late on Thursday, which raised concerns about the outlook for companies investing heavily in AI. Intel shares plunged 28.6 per cent, while chipmakers also witnessed sharp declines. Nvidia fell 4.2 per cent and AMD dropped 10.9 per cent. The broader semiconductor index declined 7.2 per cent, taking its monthly losses to more than 15 per cent. Server manufacturers Dell and HP also came under pressure, falling 10.8 per cent and 9.6 per cent, respectively.

Market Sentiment on AI Returns

"It's fair to say that this week, not just today, has been very much about the future of AI and what that's going to look like, whether there will be a positive return on investment and if so, how quickly," Oliver Pursche, senior vice president at Wealthspire Advisors in New York, told Reuters. He said companies meeting high market expectations were performing well, while those falling short were facing sharp punishment from investors.

Broader Market Performance and Crypto Challenges

The broader technology sector of the S&P 500 recorded its biggest monthly percentage decline since March 2025, while the communication services sector registered its steepest monthly fall since April 2022. Despite the market weakness, the broader earnings season remained positive. Of the 299 S&P 500 companies that had reported third-quarter results, 82 per cent had beaten consensus estimates, according to LSEG data cited by Reuters. Analysts were expecting third-quarter earnings growth of 31.6 per cent year-on-year.

Meanwhile, cryptocurrency-related stocks also declined following reports that hackers stole USD 6.3 billion from Binance. Coinbase, Strategy and Robinhood fell between 7.2 per cent and 10.6 per cent. All three major US indices closed lower for the week, while the S&P 500 and Nasdaq also recorded monthly losses. (ANI)

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