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US technology stocks are falling amid concerns over returns on artificial intelligence investments. Intel shares plunged nearly 30% on 30 October, while Alphabet lost around $500 billion in market value the day before, ER10 reports (er10.kz). Investors doubt that multibillion-dollar investments in AI and data centres will deliver the expected profits.
Why Intel and Alphabet disappointed investors
Intel shares fell after the company issued a weak revenue forecast for the next quarter. Revenue rose, but the business outlook and high spending disappointed investors. The latest revenue growth failed to ease concerns about future performance.
Shares in Alphabet, Google’s parent company, fell about 12.6% in a single trading session. Its market capitalisation — the company’s market value — shrank by approximately $500 billion. Rising AI spending and doubts about whether new technologies will deliver sufficient returns were among the reasons for the sell-off.
Which companies were hit by the sell-off
Other technology companies also suffered losses. Reddit shares fell around 29%, Roblox about 19%, SanDisk around 15% and Arm roughly 12%. The sell-off spread beyond Intel and Alphabet.
According to Reuters figures cited by ER10, the Nasdaq-100’s decline in October put more than $2 trillion of its constituent companies’ combined market value at risk. This estimate covers companies included in the index. It does not mean they all lost the same proportion of their value.
Why the market is watching Amazon’s spending
Amazon is adding to the concerns. Heavy investment in AI infrastructure is reducing its free cash flow. Meanwhile, the company’s cloud business continues to grow rapidly.
Amazon’s situation reflects a broader concern among investors: whether enormous spending on artificial intelligence is justified. Investors are scrutinising these investments more closely and want to see actual financial results instead of promises of future profits.
What falling share prices mean for the AI industry
Falling share prices point to a reassessment of expectations and growing doubts about investment returns. However, it is too early to describe this as an AI industry collapse comparable to the dot-com crash.
Investors will now focus on technology companies’ financial results. The main question is what returns spending on artificial intelligence and data centres will deliver.
