US tech stocks see sharp falls as AI spending nears $1tn

ByRachel Clun Business reporter, Reporting fromNew York. 30 October 2026, 14: 50 GMT.

Key points

• Major tech firms have ramped up artificial intelligence spending, with Meta, Alphabet, Oracle, Amazon, and Microsoft committing to spending $800bn between them in 2026.
• While Google owner Alphabet saw its stock cost continue to fall another 1.4% after a 12% plunge on Thursday, shares in Intel plummeted by 28% on Friday.
• The bigger losses on Friday were elsewhere nevertheless, with Intel shedding more than $130bn in value.
• While the Nasdaq closed 2.8% lower, it is up 7.8% over the last year.
• Alphabet expects to spend up to $205bn this year on investments, almost entirely related to AI.

Tech stocks tumbled for the second day in a row as reservations rise over the hundreds of billions of dollars firms are investing in artificial intelligence (AI).

While the Nasdaq index of the largest tech firms listed in the US, concluded October with its worst monthly slide since March 2025, other tech stocks, including Reddit and Amazon additionally fell.

While tech firms are spending major on AI, their earnings are not always gathering analysts' expectations, spooking investors and creating fears of an AI bubble.

Alphabet's stock market value fell sharply on Thursday, taking more than $500bn (£374bn) off its market value after it made public the AI summaries it now provides as the top answer to search queries were affecting its core search advertising revenue.

Meanwhile, Alphabet expects to spend up to $205bn this year on investments, almost entirely related to AI.

Meanwhile, the bigger losses on Friday were elsewhere nevertheless, with Intel shedding more than $130bn in value.

In practice, the chip maker remarked it planned to rise spending on AI despite weaker demand for computers, a major source of demand for its micro-processors.

On Thursday, Intel's finance chief David Zinsner remarked the firm did not expect to bring in more cash than it spent this year and forecast lower-than-expected revenue for its fourth quarter.

"Looking ahead, we see the PC slowdown continuing at least through the first half of next year, " he remarked in the chip maker's third quarter earnings report.

In the earnings call, he remarked the firm had significantly ramped up investment in equipment in the third quarter and anticipated that to be "even more significant" in the after three months. Amazon and Reddit down.

Amazon on Thursday made public it had additionally spent more cash than it was making, and that spending had rose six-fold over the span of three months.

In practice, the firm has committed to spending $220bn this year, putting the capital towards investments such as AI data centres, network equipment, and servers.

Amazon shares recovered some overnight losses, but were still down by 1.4% at the end of Friday trading.

After the social media platform made public weaker-than-expected daily user figures and cautioned that Google's growing AI-driven search was hurting referral traffic, reddit stock plunged by 29%.

As its daily active user numbers dropped, stock in online game platform Roblox additionally fell, down by 18%.

For context, a number of major tech firms have noted earnings this week, including Microsoft, and analysts noted there were questions concerning the payout from the massive investments in AI.

Chris Low, from investment management firm FHN Financial, remarked the bulk of what was happening in the stock market was in reaction to some of the biggest tech players such as Amazon and Google.

He informed Reuters the businesses were "showing some pretty significant growing pains as they aggressively pursue the AI build-out".

"The thinking is that these signs suggest that the entire sector is going to slow down." 'Investors have turned ruthless'.

Plenty of analysts have been debating the possibility of an AI bubble in the stock market.

For context, the worry is that some tech firms will not be able to justify their sky-high valuations since the cost of building AI data centres and developing the software will end up being greater than the capital they can create from it.

Kathleen Brookes, research director at trading firm XTB, remarked there have been numerous ups and downs in AI trade in recent months.

"Investors have turned ruthless, punishing any signs of disappointment in earnings, " she remarked.

"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."

Nevertheless, stock market values for numerous of these firms remain well above where they were a year ago.

While the Nasdaq closed 2.8% lower, it is up 7.8% over the last year. While Alphabet is down 1.3%, similarly Amazon is up almost 8% over the past 12 months. According to Brookes, november is typically a robust month for stocks.

"If we see 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 remarked.

In short, US tech stocks see sharp falls as AI spending nears $1tn is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.