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US tech stocks see sharp falls as AI spending nears $1tn
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Tech stocks tumbled for the second day in a row as concerns rise over the hundreds of billions of dollars firms are investing in artificial intelligence (AI).
Key facts
- Major tech companies have ramped up artificial intelligence spending, with Meta, Alphabet, Oracle, Amazon, and Microsoft committing to spending $800bn between them in 2026
- Alphabet's stock market value fell sharply on Thursday, taking more than $500bn (£374bn) off its market value after it revealed the AI summaries it now provides as the top answer to search queries
- Shares in Intel plummeted by 28% on Friday, while Google owner Alphabet saw its stock price continue to fall another 1.4% after a 12% plunge on Thursday
- At the same time, Alphabet expects to spend up to $205bn this year on investments, almost entirely related to AI
Summary
Shares in Intel plummeted by 28% on Friday, while Google owner Alphabet saw its stock price continue to fall another 1.4% after a 12% plunge on Thursday. Other tech stocks, including Reddit and Amazon also fell, while the Nasdaq index of the largest tech firms listed in the US, ended October with its worst monthly slide since March 2025. While tech firms are spending big on AI, their earnings are not always meeting analysts' expectations, spooking investors and creating fears of an AI bubble. Major tech companies have ramped up artificial intelligence spending, with Meta, Alphabet, Oracle, Amazon, and Microsoft committing to spending $800bn between them in 2026.