Markets
Tech stocks slide as investors question the returns from massive AI spending
US technology shares fell sharply for a second day as investors questioned whether escalating AI infrastructure costs will produce sufficient returns. Intel lost 28%, Reddit fell 29% and Roblox dropped 18%, while Alphabet continued declining after saying AI search summaries were affecting advertising revenue. Five major firms are committing about $800 billion to 2026 spending, and Amazon plans $220 billion. Analysts cited weaker earnings signals, cash outflows and rising skepticism, although the Nasdaq remained above its level a year earlier.
Editorial summary · Publisher article
What matters
- Alphabet expects up to $205 billion in investment this year, largely tied to AI.
- Intel plans to increase equipment spending despite weaker PC demand and expects lower fourth-quarter revenue.
- Amazon said its cash spending increased six-fold over three months and exceeded cash generation.
A market pullback, not yet a full reversal
The Nasdaq ended October down 2.8%, its worst monthly performance since March 2025, but remained up 7.8% over the prior year. Amazon was also still higher year on year, while Alphabet was slightly lower.
Context & caveats
- The article reports investor concerns and analyst interpretations; it does not establish that AI investment has peaked or that a bubble will burst.
Why this made the edition
Detailed market reporting connects sharp share-price moves to company earnings, cash spending, AI infrastructure commitments and investor concerns about returns.
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