US tech shares tumble as AI spending approaches €1tn

US technology stocks fell for a second consecutive day on Friday as investors grew uneasy about the scale of corporate spending on artificial intelligence (AI).

Intel led the declines, its share price dropping 28% and wiping more than $130 bn off its market value. Alphabet, the parent company of Google, fell a further 1.4% after a 12% plunge the previous day. Other losses included Reddit, down 29%, and Amazon, which slipped 1.4% despite a partial recovery.

The Nasdaq index ended October with its steepest monthly slide since March 2025, reflecting broader concerns that earnings are not keeping pace with the massive AI investments. Meta, Alphabet, Oracle, Amazon and Microsoft have pledged to spend a combined $800 bn on AI by 2026, while Alphabet alone expects to invest up to $205 bn this year, almost entirely on AI.

Intel’s finance chief David Zinsner warned that the company does not expect to generate more cash than it spends this year and forecast weaker fourth‑quarter revenue, citing a continued PC slowdown. Amazon disclosed that its cash outflows have risen six‑fold over three months as it commits $220 bn to AI data centres, network equipment and servers.

Analysts said the market is reacting to “growing pains” as the sector pursues aggressive AI build‑outs, raising the spectre of an AI bubble if firms cannot justify the high costs. Despite the recent falls, many of the companies remain above their levels a year ago, with the Nasdaq up 7.8% over the past twelve months.

Source: BBC News. Photo: Rafael Minguet Delgado / Pexels.