NEW YORK, October 30, 2026 — Tech stocks erased more than $1 trillion in market value Friday as skepticism over artificial-intelligence spending intensified, driving the Nasdaq 100 to its worst one-day drop since mid-June.
Investors question ROI on hundreds of billions in data center builds
The sell-off deepened a day after Big Tech earnings underwhelmed, highlighting a growing divide between heavy capital outlays and measurable returns. The Nasdaq 100 fell 3.4% in afternoon trading, its steepest decline since mid-June, while the broader S&P 500 slipped 2.3%. Intel shares tumbled 29%, the company’s worst single-day performance on record dating to the 1980s. Amazon sank 1.9% after reporting $42.4 billion in free cash flow burn over the prior 12 months, and Alphabet shed about $500 billion in market value Thursday, its worst day ever.
Amazon braces for $220 billion in 2026 capital expenditures
Amazon Chief Executive Officer Andy Jassy told shareholders to prepare for approximately $220 billion in cash capital expenditures in 2026, the majority allocated to AWS. The company reported spending on AI infrastructure accelerated last quarter while core online shopping growth slowed. Amazon burned through $42.4 billion of cash over the prior 12 months according to free cash flow measures, and spent $94.8 billion on property and equipment, primarily through investments in artificial-intelligence technology.
Alphabet’s mammoth AI bets weigh on balance
Alphabet cited mammoth investments in AI after burning more cash during the summer than the spring. The Google parent company’s stock dropped more than 12% Thursday, dragging the S&P 500 lower and erasing about $500 billion in market value, the worst single-day decline on record. Investors are examining Big Tech’s massive AI spending through a more skeptical lens, questioning whether hundreds of billions in data center builds will deliver the expected productivity gains.
Midterm election backdrop adds pressure to shaky indices
The market correction pushed the Nasdaq 100 close to “correction territory,” defined as a decline of 10% or more from an index’s last record high. The sell-off coincides with Tuesday’s midterm elections in the United States, a period historically associated with increased volatility. President Donald Trump has frequently cited the stock market’s performance as a measure of his administration’s success, while Vice President JD Vance and Secretary of State Marco Rubio have remained largely silent on the sell-off. The Philadelphia semiconductor index sank 7.2% on Friday, and so-called “neocloud” stocks such as Nebius and CoreWeave dropped more than 10% as investors seek clearer signs of returns from the AI spending surge.
Midterm Election Backdrop Adds Pressure to Shaky Indices
The market correction pushed the Nasdaq 100 close to “correction territory,” defined as a decline of 10% or more from an index’s last record high. The sell-off coincides with Tuesday’s midterm elections in the United States, a period historically associated with increased volatility. President Donald Trump has frequently cited the stock market’s performance as a measure of his administration’s success, while Vice President JD Vance and Secretary of State Marco Rubio have remained largely silent on the sell-off. The Philadelphia semiconductor index sank 7.2% on Friday, and so-called “neocloud” stocks such as Nebius and CoreWeave dropped more than 10% as investors seek clearer signs of returns from the AI spending surge.
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. The last time Amazon told investors it was upping its AI spending budget, the market rewarded the decision by sending shares up more than 15%. 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’re getting from all the time and resources they’re putting into AI adoption. In response, some investors are now looking at Big Tech’s massive AI spending through a more skeptical lens. Nonetheless, Amazon CEO Andy Jassy told shareholders Thursday to brace for even more spending. “We still expect 2026 cash [capital expenditures] of approximately $220 billion, the majority for AWS, and expect to spend meaningfully more in 2027,” he said on the company’s earnings call. Amazon’s spending had already been set to double from 2025. Friday’s losses follow significant selling in shares of Alphabet on Thursday. The Google parent company shed about $500 billion in market value — its worst day ever. The Philadelphia semiconductor index, of which Intel is a member, sank 7.2% on Friday, and so-called “neocloud” stocks such as Nebius and CoreWeave dropped more than 10% as investors seek clearer signs of returns from the AI spending surge.
Sources
- Tech stocks wipe out $1 trillion in value as concerns deepen about the AI boom
- The markets are starting to act seriously weird. Blame AI
- The sell-off for tech stocks drags Wall Street toward its worst day since June
Photo: Roland Arhelger (CC BY-SA 4.0)
