US technology stocks tumbled for a second consecutive day on Friday as investors grew increasingly worried about the massive sums companies are pouring into artificial intelligence. The tech-heavy Nasdaq index opened at its lowest level in more than two months, sinking more than 3.5%, while shares in chipmaker Intel plummeted by as much as 30%.
The sell-off followed a brutal session on Thursday when Alphabet, Google's parent company, lost more than $500bn in market value after revealing that its AI-powered search summaries were hurting its core advertising revenue. With major tech firms committing to spend $800.6bn between them in 2026, concerns are mounting that the AI boom may be inflating a bubble that could burst.
Alphabet and Intel Lead the Fall
Alphabet's stock continued to slide on Friday, down another 2.2% after Thursday's drop of more than 12%. The company disclosed that its AI-generated search summaries were affecting its search advertising business, and it expects to spend up to $205bn this year on investments, almost entirely related to AI. Intel, meanwhile, was on track to lose more than $130bn in value as its shares kept falling. The chipmaker said it plans to increase AI spending despite weaker demand for computers, a major source of demand for its microprocessors.
Intel's finance chief David Zinsner said the firm did not expect to bring in more cash than it spent this year and forecast lower-than-expected revenue for the fourth quarter. "Looking ahead, we see the PC slowdown continuing at least through the first half of next year," he said in the company's third-quarter earnings report. He added that Intel had significantly ramped up investment in equipment in the third quarter and expected that to be "even more significant" in the following three months.
Amazon, Reddit and Roblox Also Hit
Amazon shares fell as much as 6% in overnight trading after its earnings fell short of investor expectations. The company revealed it had spent more cash than it made, with spending increasing six-fold over three months. Amazon has committed to spending $220bn this year on AI data centres, network equipment and servers. Its shares recovered slightly but were still down about 1.6% in Friday trading.
