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<\/p>\nTech stocks plunged Friday, putting the Nasdaq 100 index on course for a more than $1 trillion drop. The index fell 3.4% in early afternoon trading, on course for its worst one-day drop since mid-June.<\/p>\n
Driving the declines were shares of Amazon, which fell 3%, and Intel, which plunged 30%. Both companies reported quarterly earnings this week that failed to reassure investors and analysts.<\/p>\n
Amazon had already lost as much as 10% late Thursday.<\/p>\n
The broader S&P 500 also dropped sharply, by more than 1.7%. The index\u2019s tech sector was by far the worst performing on Friday, tumbling more than 4.1%.<\/p>\n
As trillion-dollar tech companies raise and spend hundreds of billions of dollars to build massive artificial intelligence data centers and develop AI models, investors have been on edge as they look for clear signs that all this spending is actually delivering returns.<\/p>\n
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On Thursday, Amazon reported that its spending to build out AI had continued at a faster clip than expected last quarter, while growth in its core online shopping business had slowed. <\/p>\n
The last time Amazon told investors it was upping its AI spending <\/a>budget, the market rewarded the decision by sending shares up more than 15%.<\/p>\n But a lot has changed in the past three months. Some of the big companies that pay to use AI models have tightened their token budgets. Others have raised questions about exactly how much benefit they\u2019re getting from all the time and resources they\u2019re putting into AI adoption.<\/p>\n In response, some investors are now looking at Big Tech\u2019s massive AI spending through a more skeptical lens<\/a>.<\/p>\n Nonetheless, Amazon CEO Andy Jassy told shareholders Thursday to brace for even more spending. <\/p>\n \u201cWe still expect 2026 cash [capital expenditures] of approximately $220 billion, the majority for AWS, and expect to spend meaningfully more in 2027,\u201d he said on the company\u2019s earnings call. Amazon\u2019s spending had already been set to double from 2025.<\/p>\n Intel, meanwhile, told investors that its profits and sales in the fourth quarter would be lower than expected, which sent the stock tanking.<\/p>\n
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Intel CEO Lip-Bu Tan in Taipei, Taiwan, in June. Tan cited supply chain issues in the company’s lackluster performance.Cheng Chia Huang \/ Getty<\/p>\n![\"\"\/](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/10\/1793327905527_now_staytuned_ai_google_stock_261029_S3_1920x1080-ddilwx.jpg\")
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