US tech stocks fall as AI spending approaches $1 trillion

Technology stocks have experienced significant declines as investors raise concerns regarding the hundreds of billions of dollars being invested in artificial intelligence (AI). The Nasdaq index, which tracks the largest tech firms listed in the US, ended October with its worst monthly slide since March 2025.

Major Tech Earnings and Market Impact

Several major technology companies reported earnings that contributed to the market volatility:

• Alphabet: The parent company of Google reported a decline in market value of over $500 billion. Alphabet revealed that AI summaries provided as top answers to search queries were affecting its core search advertising revenue. The company expects to spend up to $205 billion this year on investments, almost entirely related to AI.
• Intel: Shares in Intel plummeted by 28% on Friday, with some reports stating a 29% collapse. Intel's finance chief David Zinsner stated the firm did not expect to bring in more cash than it spent this year and forecast lower-than-expected revenue for the fourth quarter.
• Amazon: The company has committed to spending $220 billion this year on investments including AI data centers, network equipment, and servers. Amazon reported it had spent more cash than it was making, with spending increasing six-fold over a three-month span.
• Reddit: Stock plunged by 29% after the platform reported weaker-than-expected daily user figures and warned that Google's AI-driven search was hurting referral traffic.

AI Infrastructure Spending

Major tech companies have significantly increased their commitments to AI infrastructure. Meta, Alphabet, Oracle, Amazon, and Microsoft are collectively committing to spend $800 billion between them in 2026.

According to industry estimates, Microsoft plans to spend approximately $190 billion in capital expenditures for 2026, while Meta has adjusted its range to between $135 billion and $145 billion. Total industry commitment to AI infrastructure has pushed cumulative spending past $1.5 trillion since the generative AI boom began.

Investor Sentiment and Market Concerns

Analysts have noted a shift in investor behavior. Kathleen Brookes, research director at trading firm XTB, said, "Investors have turned ruthless, punishing any signs of disappointment in [third quarter] earnings."

There is ongoing debate among analysts regarding a potential AI bubble. Concerns exist that the cost of building AI data centers and developing software may exceed the revenue these technologies generate. Chris Low, from investment management firm FHN Financial, stated that companies are "showing some pretty significant growing pains as they aggressively pursue the AI build-out."

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Sources

• bbc.co.uk: US tech stocks see sharp falls as AI spending nears $1tn - BBC News
• intellectia.ai: Tech Stocks Crash as AI Spending Fears Erase $1 Trillion

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.