Wall Street Sell-Off Deepens Friday as AI Spending Worries Spread to Intel and Amazon

Wall Street fell sharply on Friday as worries about the payoff from massive spending on artificial intelligence spread beyond Alphabet to chipmakers and other large technology companies. The Nasdaq Composite dropped 3.1 percent and the S&P 500 fell 1.9 percent, each headed for its worst day since June, while the Dow Jones Industrial Average fell 500 points, or 1 percent.

Intel plunged 30 percent on Friday after issuing weaker guidance for the fourth quarter, citing weakness in the personal computer market and manufacturing bottlenecks. Amazon shares fell 2 percent after an earnings report that pointed to another increase in AI spending. Alphabet shares fell a further 1.5 percent on Friday, a day after sinking more than 12 percent.

Alphabet’s Thursday drop set the tone

Alphabet’s Thursday fall wiped out about $500 billion in market value, according to CNN, the second-largest single-day loss of market value in history after chipmaker Nvidia’s nearly $600 billion decline in early 2025. It was also the company’s worst single-day percentage decline on record, larger than any fall during the COVID-19 pandemic or the 2008 financial crisis, CNN reported.

The sell-off followed Alphabet’s third-quarter results. Revenue rose 25 percent from a year earlier to $127.6 billion, just below the roughly $128 billion analysts had expected. Capital spending reached $51.4 billion in the quarter, compared with $91.4 billion for all of 2025, and the company recorded a second straight quarter of negative free cash flow. Google Cloud revenue more than doubled to $30.7 billion, but growth in Google Search revenue slowed to 12 percent from 17 percent in the prior quarter.

Investors want returns on the spending

Alphabet, Microsoft, Meta and Amazon are together spending hundreds of billions of dollars building data centers. Meta disclosed a quarter of negative free cash flow last week for the first time since 2012, and Amazon reported negative free cash flow of $42.4 billion over the past 12 months. Microsoft, by contrast, reported $18.6 billion in positive free cash flow for the quarter, and its stock is down just 5 percent from a record high earlier in October.

Friday’s selling reached across the chip sector: Nvidia shares dropped 4.8 percent and a closely watched index of chipmakers sank 8.2 percent. Google and Meta are both in a bear market, down more than 20 percent from their peaks, according to CNN. As investors sold technology stocks, they moved money into defensive parts of the market such as consumer staples and government bonds.

“Investors don’t just want capex, they want to see the returns already,” Neil Wilson, a strategist at Saxo Markets, said in a note. Matt Maley, chief strategist at Miller Tabak + Co, wrote that Alphabet’s promise of returns from AI “is getting pushed even further down the road.” Paul Stanley, managing director at Arca, struck a calmer note, writing that “the AI trade is down, but not out” and that pullbacks are normal in the early stages of AI development.

Friday was the final trading day of a difficult month for AI stocks. Software company ServiceNow had plunged 27 percent on Thursday, its worst day on record, after its profit results slightly missed expectations. With midterm elections on Tuesday and the October jobs report due next Friday, investors face two more tests of the market’s direction in the coming days.

Reporting based on coverage by CNN and Devdiscourse.