Tech Stocks Tumble as Wall Street Questions AI Returns, says BNN Bloomberg
A deepening tech stock sell-off on the final trading day of October dragged the Nasdaq toward its worst single-day performance since June, fueled by investor anxiety over whether massive artificial intelligence spending will generate sufficient returns, BNN Bloomberg reported.
The S&P 500 and Nasdaq Slide on AI Spending Scrutiny
The Nasdaq composite dropped 3 per cent by midday Eastern time, heading toward its worst day since June. The broader S&P 500 fell 1.8 per cent, threatening to erase its gains for October despite hitting an all-time high earlier in the month. The Dow Jones Industrial Average slid 496 points, or 0.9 per cent.
BREAKING 🚨: Intel $INTC plunging 29%, on track for largest drop in its 55-year history as a publicly traded company 📉📉📉
Alphabet shares dropped more than 12 per cent on October 29 following an earnings report that revealed consecutive quarters of negative free cash flow driven by massive data center investments. The company posted negative free cash flow of $9.07 billion in the third quarter. Investors worried that AI chatbots could threaten Google’s search advertising business. Alphabet shares fell another 1.5 per cent on Friday. Amazon reported burning through $42.4 billion in free cash flow over the prior 12 months while spending $94.8 billion primarily on property and equipment for AI technology. CNBC noted that Amazon maintained its 2026 capital expenditures forecast at $220 billion.
Meta also disclosed its first quarter of negative free cash flow since 2012 last week. Google and Meta have both entered bear markets, falling over 20 per cent from their respective peaks in May and August 2025. In contrast, Microsoft reported $18.6 billion in positive free cash flow this past quarter, with its stock down only 5 per cent from its record high earlier this month.
The extreme reaction to earnings on the Nasdaq last night demonstrated the power of errant hedge funds frantically trying to move into KO and out of anything four letters, KO being a metaphor for a solid core group of stocks called CPG or consumer packaged goods stocks
We’re moving out of the hopes and dreams phase of the AI trade and into the ‘show me’ phase. — Joe Tigay, portfolio manager at Equity Armor Investments
Neil Wilson, a strategist at Saxo Markets, noted in a memo that investors now want to see returns rather than just capital expenditures, adding that the market is conducting a more critical evaluation of the “monster AI splurge.”
Intel Slumps Following Weak Fourth-Quarter Profit Forecast
Intel led the downward momentum among semiconductor stocks, flirting with its worst trading day since 1974 after tumbling 30.1 per cent. Chief Executive Officer Lip-Bu Tan pointed to ongoing pressures within the personal computer industry. The chipmaker issued a fourth-quarter profit forecast that missed Wall Street expectations, despite reporting a stronger-than-expected profit for the latest quarter. Intel also cited manufacturing bottlenecks. Revenue for its physical artificial intelligence and client computing group fell 5 per cent to $8.1 billion compared to the previous year.
The broader semiconductor sector absorbed heavy losses in sympathy. Nvidia shares fell between 4% and 4.8% as chipmakers broadly came under pressure. Advanced Micro Devices dropped 11 per cent, while a closely tracked index of chipmakers sank 8.2 per cent, per CNN. Broadcom fell 5 per cent, and Sandisk dropped 12 per cent despite beating fiscal first quarter estimates; Sandisk also announced a forward stock split of eight-for-one.
Cryptocurrency Stocks Drop After Binance Exchange Hack
Stocks in the cryptocurrency sector tumbled following a hack at Binance.
AI giveth, AI taketh away! Alphabet plunged 12.6% in its worst session ever – a 6.5-sigma move, per Goldman Sachs. $525bn wiped out: the 2nd-largest one-day market-cap loss in history. Search revenue missed expectations, while 2027 capex is set to rise “significantly” from this… pic.twitter.com/6Sn1PpI7RF
Defensive Sectors and Commodities Offer Resiliency
Outside of the technology sector, equities demonstrated relative stability as several companies reported strong summer earnings. ExxonMobil climbed 1.8 per cent and Chevron added 1.6 per cent after topping profit estimates. Mondelez International rose 3.7 per cent, while Colgate-Palmolive gained 3.5 per cent on international pricing power.
The Dow was further supported by Walmart and Coca-Cola, which both rose nearly 2 per cent, and Procter & Gamble, which climbed over 1 per cent. Merck and Amgen each added about 2 per cent. Keith Buchanan of Globalt described the current market as “discerning” and “scrutinizing,” noting “real economy risks.”
Spicy list of S&P 500 losers this morning… $NOW $FTNT $GOOGL $CAT $MRVL pic.twitter.com/6vgB26PM3M