US tech stocks tumbled for a second day Friday, extending losses driven by concerns that massive artificial intelligence investments are failing to meet earnings expectations. Intel shares plummeted up to 30% following Alphabet's $500 billion market value drop Thursday, while the Nasdaq index sank over 3.5%. Major firms including Meta, Alphabet, Oracle, Amazon, and Microsoft have committed $800.6 billion in AI spending through 2026, yet earnings often fall short, spooking investors.
Alphabet's search advertising revenue faces pressure from its own AI summaries, and the company expects up to $205 billion in AI-related investments this year. Intel warned of continued PC weakness through next year's first half, forecasting lower fourth-quarter revenue. Amazon shares fell 6% after earnings missed estimates, revealing spending had increased six-fold over three months.
Reddit dropped 26% on weaker user figures, and Roblox fell nearly 20% as daily active users declined. Analysts warn the sector is showing "significant growing pains" as firms aggressively pursue AI build-out, with fears mounting that some companies cannot justify sky-high valuations against the cost of AI development.
Source: Hacker News · Summarized by HeadlinesBriefing