Stocks Close October With Sharpest Slide of the Year as AI Spending Nears $1 Trillion
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Technology shares fell for a second session on Friday as investors questioned whether the industry’s accelerating spending on artificial intelligence will produce adequate returns, extending a selloff that left the Nasdaq 100 in its third correction of 2026.
The S&P 500 dropped 1.8 per cent on Friday, breaching its 100-day moving average in the biggest fall for stocks since June, Bloomberg reported. The Nasdaq 100 entered correction territory, a decline of 10 per cent or more from a recent peak. The Nasdaq index of the largest American-listed technology firms closed October with its sharpest monthly slide since March 2025.
The declines followed disappointing quarterly results from several of the largest technology companies. Intel shares fell 28 per cent on Friday, shedding more than $130 billion in market value. The chipmaker said it planned to increase spending on artificial intelligence despite weaker demand for computers, a major market for its microprocessors. Intel’s finance chief, David Zinsner, said on Thursday that the company did not expect to bring in more cash than it spent this year and forecast lower-than-expected revenue for the fourth quarter.
Alphabet fell a further 1.4 per cent on Friday after a 12 per cent plunge on Thursday that took more than $500 billion off its market value. The Google parent disclosed that the artificial intelligence summaries it now places at the top of search results were affecting its core search advertising revenue. Alphabet expects to spend as much as $205 billion this year on investments, almost all of it tied to artificial intelligence.
Amazon, which committed to $220 billion of spending this year on data centres, network equipment and servers, disclosed that it had spent more cash than it earned, with outlays rising sixfold over three months. Its shares recovered some overnight losses but still closed 1.4 per cent lower. Reddit shares plunged 29 per cent after the platform reported weaker-than-expected daily user figures and warned that Google’s artificial-intelligence-driven search was reducing referral traffic.
The spending commitments of the largest firms have drawn scrutiny. Meta, Alphabet, Oracle, Amazon and Microsoft have committed to $800 billion between them in 2026, and combined industry outlays approach $1 trillion. Earnings have not consistently met analysts’ expectations, feeding concern that investment has outrun revenue.
Traders will watch the November earnings reports of the remaining large technology firms and the pace of data-centre commitments for evidence of whether returns are arriving.