Nasdaq Falls 2.9% as AI Spending Fears Hit Chip and Technology Stocks

The Nasdaq Composite fell 2.9% on October 30 as disappointing results from Intel and Amazon sharpened investor doubts about how quickly massive spending on artificial intelligence will generate returns.

Intel plunged 28.6%, while the selling spread through chipmakers and companies supplying computing infrastructure. Nvidia fell 4.2%, AMD dropped 10.9% and the broader semiconductor index lost 7.2%, according to Reuters.

The technology-heavy Nasdaq closed at 25,437.00, down 747.73 points. Its largest daily percentage decline since June 5 left it 7.8% below the record closing level reached October 6.

The S&P 500 fell 1.82% to 7,580.07, and the Dow Jones Industrial Average declined 1.09% to 51,770.31. All three indexes ended the week lower. The Dow nevertheless finished October with a gain, while the S&P 500 and Nasdaq recorded monthly losses.

Fast Cloud Growth Meets an Enormous Investment Bill

Amazon’s results illustrated the tension between rising demand and the cost of serving it. Amazon Web Services revenue increased 39.3% to $46 billion in the third quarter, accelerating from the previous quarter and marking its fastest growth in nearly five years.

Chief Executive Andy Jassy said Amazon still expected approximately $220 billion in capital spending in 2026, largely for AI data centers. That compares with $128 billion the previous year.

Amazon also reported negative free cash flow of $42.4 billion for the trailing 12 months. The company was not reporting a $42.4 billion cash balance: the figure represented cash outflows exceeding the amount available under that measure.

Jassy defended the investment, saying customers were consuming new computing capacity almost as quickly as the company installed it. He projected substantial further growth for AWS, while investors weighed the cost and timing of that expansion.

Core Results and Holiday Outlook Draw Scrutiny

Amazon earned $1.89 a share on revenue of $201.94 billion, below FactSet analyst expectations of $1.97 and $202.2 billion, AP reported.

The company said a shift in Prime Day’s calendar affected the year-over-year comparison. Most major markets held the event in the second quarter this year rather than the third.

For the holiday quarter, Amazon forecast sales of $240 billion to $247 billion, a range that included the analyst estimate. Its shares initially fell sharply after the report but recovered part of the decline during Friday’s session, Reuters said.

Selling Extends Beyond the Biggest Companies

Dell fell 10.8% and HP dropped 9.6%. The semiconductor index’s October loss exceeded 15%, and the S&P 500 technology sector recorded its worst monthly percentage performance since March 2025.

That weakness came despite generally strong corporate earnings. Of 299 S&P 500 companies that had reported, 82% beat consensus expectations, according to LSEG data cited by Reuters.

The divide reflects the height of expectations surrounding AI-related companies, not simply whether their sales are growing. Wealthspire Advisors’ Oliver Pursche told Reuters that investors were judging both the prospect of positive returns and how quickly those returns would arrive.

Companies meeting those lofty expectations were being rewarded, he said, while those falling short were being punished.

References: Nasdaq futures tumble as Amazon, Intel results deepen AI spending woes | Amazon offers cautious view after disappointing 3Q results but delivers strong cloud growth