US technology stocks fell sharply on Friday as investors grew concerned about the mounting costs of artificial intelligence infrastructure.
Intel shares dropped as much as 30% after the chip maker warned of a weakening computer market despite plans to increase AI spending. Chief financial officer David Zinsner said the firm did not expect to bring in more cash than it spent this year and forecast lower-than-expected fourth-quarter revenue. "Looking ahead, we see the PC slowdown continuing at least through the first half of next year," he said.
Amazon shares fell as far as 6% before recovering slightly after Thursday earnings revealed the company was spending more cash than it made, with spending up six-fold over three months.
Alphabet stock fell 1% on Friday, continuing a $500 billion plunge from Thursday after the company revealed its own AI summaries were harming search advertising revenue.
The Nasdaq opened at its lowest level in more than two months, down 2.5%. Reddit shares fell 26% after the platform reported weaker daily user figures and warned that Google's AI-driven search was cutting referral traffic. Roblox fell nearly 20% as its daily active user numbers dropped.
Chris Low of FHN Financial told Reuters the largest tech companies were "showing some pretty significant growing pains as they aggressively pursue the AI build-out," and that these signs suggested the entire sector would slow.