United States (US) technology stocks lost more than $1 trillion in market value on Friday as investors questioned whether major companies’ spending on Artificial Intelligence infrastructure would generate returns, sending the Nasdaq 100 towards correction territory.
The Nasdaq 100 fell 3.4 percent in afternoon trading, marking its steepest single-day decline since mid-June. The broader S&P 500 dropped 1.8 percent, while its technology sector recorded the biggest sectoral loss, falling more than 4.2 percent.
The sell-off brought the Nasdaq 100 close to a correction, commonly defined as a decline of at least 10 percent from an index’s most recent record high. The Nasdaq Composite, which tracks more than 3,000 companies listed on the exchange, also fell 2.8 percent.
Intel led the losses, with its shares plunging 29 percent in the company’s worst single-day decline on record, based on data dating back to the 1980s. Other semiconductor companies also recorded losses, with SanDisk falling 13 percent, while AMD, ARM Holdings, Qualcomm and Marvell each declined around 10 percent.
The Philadelphia Semiconductor Index, which includes Intel, dropped 7.2 percent, while the DRAM exchange-traded fund (ETF), which tracks companies involved in computer memory and storage, fell seven percent.
Shares of data centre operators, commonly known as neocloud companies, also came under pressure. Nebius and CoreWeave each lost more than 10 percent as investors reassessed the financial prospects of companies building infrastructure for software firms.
The losses followed quarterly earnings reports from Amazon and Intel on Thursday, which failed to reassure investors about their business outlooks.
Amazon shares initially fell as much as 10 percent in after-hours trading following its results but recovered during Friday’s session to close 1.4 percent lower. The company reported higher-than-expected spending on AI infrastructure alongside slower growth in its core online shopping business.
Amazon chief executive Andy Jassy told investors that the company expected its capital expenditure to reach approximately $220 billion in 2026, with most of the spending allocated to Amazon Web Services (AWS). He also said the company expected to spend significantly more in 2027.
“We still expect 2026 cash [capital expenditures] of approximately $220 billion, the majority for AWS, and expect to spend meaningfully more in 2027,” Jassy said during the earnings call.
The announcement came as investors questioned the returns from Big Tech’s AI investments. Some companies using AI models have tightened their token budgets, while others have raised concerns about the benefits they receive from spending resources on AI adoption.
Alphabet also faced selling pressure on Thursday, losing around $500 billion in market value in its worst single-day decline. The Google parent company’s shares fell another 1.4 percent on Friday.
