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- calendar_today October 30, 2026
Major Tech Stocks Plunge, Poised to Erase $1 Trillion in Value
On Friday, leading technology stocks experienced sharp declines, putting the Nasdaq 100 index on track to lose more than $1 trillion in value at the opening bell. The steep drop raised fresh doubts among investors about whether big-ticket AI investments are translating into tangible returns.
Amazon and Intel Lead Market Decline Amid Earnings Concerns
Amazon shares fell 7% and Intel saw a staggering 26% plunge, following quarterly earnings reports that failed to comfort investors. Both companies’ results highlighted a disconnect between high spending, particularly on artificial intelligence (AI), and slower-than-expected revenue growth or profit forecasts. Amazon reported faster-than-anticipated AI-related expenditure last quarter at a time when its core online shopping growth decelerated. Meanwhile, Intel projected profits and sales in the upcoming quarter would come in below expectations, further weighing on sentiment.
Skepticism Grows Over AI Investment Payoff
Investors have been eagerly watching for signs that ongoing spending on AI infrastructure—such as data centers and advanced model development—will deliver meaningful financial returns. While Amazon’s previously announced AI investment led to a notable rally in its shares three months ago, market attitudes have shifted. Some companies that utilize AI models have reportedly tightened budgets, while others question the benefits gained from heavy investment in artificial intelligence.
In response to concerns, Amazon CEO Andy Jassy told shareholders the company still expects 2026 capital expenditures—largely for its AWS cloud division—to total approximately $220 billion, with an even higher spend projected for 2027. This figure represents a doubling of Amazon’s AI-related capital outlays from 2025 to 2026.
Market Selloff Extends Beyond Individual Stocks
The downturn in tech was not isolated to Amazon and Intel. Futures tracking the S&P 500 index dropped by more than 1.1% early Friday, reflecting broad-based anxiety about the technology sector. Alphabet, the parent company of Google, lost approximately $500 billion in market value on Thursday—its worst trading day on record, and the second-largest single-day value loss for any company. Alphabet shares dipped another 1% Friday morning.
Semiconductor Sector and Related ETFs Hit Hard
The semiconductor sector was particularly affected: The Philadelphia Semiconductor Index, which includes Intel, sank 7% in pre-market trading. Other major chipmakers followed suit, and the ‘DRAM’ ETF, tracking companies in memory and storage, tumbled 6%. Intel’s stock had surged in previous months amid a strategic overhaul and significant U.S. government investment, with the federal government now Intel’s largest shareholder. Despite the anticipated Friday losses, the value of the government’s stake in Intel reportedly rose by 280%.
Intel’s disappointing quarter was attributed by CEO Lip-Bu Tan to ongoing manufacturing and supply chain issues, memory shortages, and softness in PC demand. Tan expressed disappointment in missing strong customer demand, and analysts at Citigroup described the company’s progress as “two steps forward, one step back.”
Impact on Treasury Yields as Capital Flows Shift
The tech market selloff contributed to a rally in U.S. Treasuries as capital shifted away from equities. Companies funding AI data center expansions have borrowed heavily in debt markets, sometimes offering rates that compete with government bonds. Amid this competition for capital, Treasury yields have risen. On Friday, yields on the benchmark 10-year U.S. Treasury dipped from just under 5% to approximately 4.89%.
Outlook Remains Uncertain for Technology Sector
The sharp drop in tech stocks, skepticism about ai spending, and high-profile declines in major companies have underscored uncertainty about the payoff from ambitious AI investment strategies. The sector’s ongoing volatility remains in focus as investors await clearer signals of financial returns from years of heavy technology spending.
Source: nbcnews.com.
