Tech stocks shed $1 trillion as AI spending doubts deepen

The Nasdaq Composite fell 2.86% on Friday to 25,437.00, its biggest one-day drop since June 5. The S&P 500 lost 1.82% and the Dow 1.09%. Intel plunged 28.6% after disappointing fourth-quarter guidance, and Amazon said its AI spending had grown faster than expected while its core online shopping business slowed. Chip stocks fell with them: Nvidia dropped 4.2% and AMD 10.9%.

Tech stocks have now erased more than $1 trillion in value, including roughly $500 billion from Alphabet on Thursday alone. Intel’s fall was its worst single-day drop on record. Amazon expects about $220 billion in capital spending this year and “meaningfully more” in 2027.

Why it matters

This is today’s highest-impact story because AI spending by a handful of tech giants has become one of the main supports for US growth and stock-market gains, and those same companies make up a large share of the index funds behind many retirement savings. Doubt that the spending will pay off now reaches beyond chipmakers, to borrowing costs and the broader economy. One sharp sell-off is not a confirmed end to the AI boom. What changed is that investors now demand evidence of returns, not just ambitious plans.