Tech stocks tumbled for the second day in a row as concerns rise over the hundreds of billions of dollars firms are investing in artificial intelligence (AI).
Shares in Intel plummeted by as much as 30% on Friday, following Google owner Alphabet’s stock price plunging by more than $500bn (£374bn) in the previous day’s trading.
Other tech stocks including Reddit and Amazon also fell, while the Nasdaq index of the largest tech firms listed in the US, sank more than 3.5%.
While tech firms are spending big on AI, their earnings are not always meeting analysts’ expectations, spooking investors and creating fears of an AI bubble.
Major tech companies have ramped up artificial intelligence spending, with Meta, Alphabet, Oracle, Amazon, and Microsoft committing to spending $800.6bn between them in 2026.
Alphabet’s stock market value plunged on Thursday after it revealed the AI summaries it now provides as the top answer to search queries were affecting its core search advertising revenue.
At the same time, Alphabet expects to spend up to $205bn this year on investments, almost entirely related to AI.
Alphabet stock continued to fall in early trading, down 2.2% after Thursday’s slide of more than 12%.
The bigger losses on Friday were elsewhere, with Intel on track to lose more than $130bn in value as its shares continued to fall in Friday trading.
The chip maker said it planned to increase spending on AI despite weaker demand for computers, a major source of demand for its micro-processors.
On Thursday, Intel’s finance chief David Zinsner said the firm did not expect to bring in more cash than it spent this year and forecast lower-than-expected revenue for its fourth quarter.
“Looking ahead, we see the PC slowdown continuing at least through the first half of next year,” he said in the chip maker’s third quarter earnings report.
In the earnings call, he said the firm had significantly ramped up investment in equipment in the third quarter and expected that to be “even more significant” in the following three months.
