Summary
- Amazon shares dropped 7% and Intel shares plunged 25% in premarket trading.
- The Nasdaq Composite fell 1.375% to 26,184.73 as tech stocks led broad losses.
- The S&P 500 slipped 0.305% while the Dow declined 0.253% on the session.
Technology shares bore the brunt of selling Friday as results from Amazon and Intel intensified investor concern over the enormous sums tech giants are pouring into artificial intelligence infrastructure. Amazon's premarket slide of 7% and Intel's steeper 25% tumble pointed to a market increasingly skeptical that heavy AI capital expenditure will translate into near-term profit.
The Nasdaq Composite bore the clearest mark of that anxiety, dropping 1.375% to 26,184.73, a sharper decline than either the S&P 500 or the Dow. The broader S&P 500 eased 0.305% to 7,720.39, while the Dow Jones Industrial Average slipped 0.253% to 52,342.56. All three indexes remain well above their 52-week lows but have pulled back from recent highs, with the S&P 500 now roughly 1.6% off its 52-week peak of 7,844.52 and the Nasdaq about 5.5% below its high of 27,722.75.
The reaction underscores a broader shift in how investors are treating AI-related spending. For much of the past two years, aggressive capital outlays on data centers, chips and cloud infrastructure were rewarded by markets as evidence of growth ambition. The latest earnings reaction suggests that patience is wearing thin, with traders now demanding clearer signs that such investment is generating returns rather than simply expanding costs.
Intel's steep drop signals particular concern about the chipmaker's position in a fast-moving and capital-intensive industry, where rivals have captured much of the demand tied to AI processing. Amazon's decline, while less severe in percentage terms, carries outsized weight given the company's scale and its heavy exposure to cloud computing, a business central to the AI buildout narrative that has powered tech valuations.
The selloff in megacap names dragged futures lower heading into the session, with Nasdaq futures also pointing to weakness tied to the same spending concerns. Investors will be watching whether other major technology companies reporting in the coming days echo the same cautious tone on AI returns, which could determine whether Friday's decline marks a brief pullback or the start of a more sustained reassessment of tech valuations heading into year-end.