A tech stock sell-off on Friday, October 30, erased more than $1 trillion in market value on Wall Street, as investors questioned whether the huge sums that Big Tech is spending on artificial intelligence will pay off. The Nasdaq 100 fell about 3.4%, its worst day since mid-June, and the S&P 500 lost about 1.8%.
Key facts
- Nasdaq 100: down about 3.4%, its biggest one-day fall since mid-June.
- S&P 500: down about 1.8%; the S&P 500 technology sector lost more than 4.2%.
- Intel: down roughly 29%, its worst single day on record.
- Chip stocks: AMD, Arm, Qualcomm and Marvell each fell around 10%.
- Total: more than $1 trillion in tech market value wiped out.
Why tech stocks fell
The sell-off followed a run of earnings reports in which AI spending grew faster than expected. Amazon said its 2026 capital expenditure would be about $220 billion and would rise meaningfully in 2027, while growth in its core retail business slowed. We covered the numbers in our Amazon Q3 earnings report.
Microsoft’s Azure cloud business grew 48%, but that only matched what investors had hoped for, and capex nearly doubled. See our Microsoft earnings summary for the details. Alphabet also had its worst trading day on record after reporting negative free cash flow.
Intel added to the pressure. The chipmaker forecast lower fourth-quarter sales and profit, citing supply-chain problems, a memory shortage and softer PC demand, which dragged down other semiconductor and memory stocks.
Is the AI boom over? What analysts say
Investors are less willing to pay high valuations for companies whose AI spending has not yet produced steady earnings and free cash flow. Google, Amazon and Meta all reported negative free cash flow in the third quarter, and the companies are increasingly turning to debt and equity markets to fund data centres.
Truist’s Keith Lerner noted that of the six tech pullbacks of at least 10% since 2023, four became deeper, reaching losses of 14% to 27%. History, he suggested, gives no timetable. On the other side, Dan Ives of Yorkville argues that enterprise adoption of AI has strengthened and that the spending reflects real demand rather than the end of the investment cycle.
What to watch next
The Nasdaq 100 is now close to correction territory, defined as a 10% drop from its last record high. Markets will look for signs that AI revenue is catching up with spending, as well as new model launches such as Google’s Gemini 4 Carbon. This article is for information only and is not investment advice.
Sources: Yahoo Finance, The Wealth Advisor, Tech Times
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