Tech Giants Crater on AI Spending Doubts as Nasdaq Tumbles 2% on Amazon and Intel Misses
What’s happening
Amazon and Intel posted disappointing earnings Friday, triggering a sharp Nasdaq selloff of more than 600 points and a 2% decline as investors reassess the return on massive AI infrastructure investments. Intel plunged 25% in premarket trading after revealing it is struggling to produce enough AI server chips while facing a weak PC market; Amazon fell 7% amid concerns that its cloud spending surge may not translate to near-term profitability.
Market impact
The selloff reignites fears that the AI trade has become overextended, with investors questioning whether tech giants can justify billions in capex before revenue materializes. Nasdaq futures fell more than 2%, and the broader tech sector faces headwinds as Reddit and other mega-cap names also disappointed, signaling potential rotation out of high-flying AI plays into value and defensive sectors.
Broader implications
The earnings misses expose a critical inflection point in the AI narrative: the market is shifting from euphoria about AI potential to scrutiny of actual returns on capital. Intel's chip production shortfall in particular threatens to constrain the AI infrastructure buildout, potentially slowing the pace of AI adoption across enterprise and cloud markets.
Sources (4)
The articles Pulse read to write this story- Tech stocks crushed as Nasdaq tumbles more than 600 pointsCBS Money WatchStrong bearish −80
Nasdaq plummets 2% as Amazon, Intel and Reddit become latest victims of AI fearsNew York Post BusinessStrong bearish −83- AMD's stock slides after Intel earnings reveal two big issuesMarket WatchStrong bearish −75
Amazon falls 7%, Intel plunges 25% in premarket trading, as pressure mounts after earningsCNBC Top StoriesStrong bearish −88
Written by Pulse AI from the articles above. Always check the original reporting before acting on it.