A punishing sell-off swept through Wall Street on Friday, wiping out more than $1 trillion in value across the technology sector as investors balked at the astronomical costs of artificial intelligence infrastructure.
The tech-heavy Nasdaq 100 dropped 3.4 percent in afternoon trading, marking its sharpest single-day retreat since mid-June and pushing the gauge toward a market correction, NBC News reported. The broader S&P 500 slipped 1.8 percent, pulled down by a slide of more than 4.2 percent in its technology component, while the Nasdaq Composite ended October enduring its steepest monthly decline since March 2025, according to BBC News.
Intel suffers record single-day collapse
Leading the retreat was chipmaker Intel, whose shares suffered their worst drop on record dating back to the 1980s. The stock sank roughly 29 percent on Friday, according to NBC News, following a dive of as much as 30 percent earlier in the session reported by Business Insider. The crash wiped out over $130 billion of the company’s market valuation.
Intel rattled Wall Street on Thursday by issuing fourth-quarter revenue projections between $15 billion and $16 billion, falling short of analyst expectations, alongside a projected per-share profit drop to $0.25 from $0.52 in the third quarter. While third-quarter revenue grew 20 percent year over year to $16.5 billion, leadership warned of severe constraints.
Intel Chief Executive Lip-Bu Tan pointed to significant supply bottlenecks during the company’s conference call, stating that the business faced challenges including “the unprecedented memory crunch and the resulting softness in PC demand.” Tan also cited a temporary two-week closure at an Israeli plant following an accident, which Intel expects will lower fourth-quarter revenue by approximately $300 million.
The federal government remains Intel’s largest shareholder after taking an equity stake during recent restructuring efforts, with NBC News reporting that the value of that holding remains up 280 percent despite Friday’s crash.
Mounting skepticism over Big Tech capex
The tech rout began gaining momentum on Thursday after earnings announcements from Alphabet and Amazon unsettled market participants. Alphabet shed approximately $500 billion in equity value during Thursday’s trading—its steepest single-day market loss ever—after disclosing that AI-generated search overviews were dampening core search advertising revenue, BBC News reported. Alphabet shares slipped an additional 1.4 percent on Friday.
At the same time, Amazon projected that its capital expenditures would hit roughly $220 billion in 2026, primarily for cloud unit AWS, with Chief Executive Andy Jassy warning shareholders to anticipate even higher spending in 2027. Although Amazon shares dipped as much as 10 percent in after-hours trading Thursday, they pared losses to close down 1.4 percent on Friday, NBC News reported.
Combined, tech heavyweights Meta, Alphabet, Oracle, Amazon, and Microsoft have pledged $800 billion in capital spending for 2026, according to BBC News. But with corporate customers trimming their spending and questioning measurable efficiency gains, market enthusiasm has given way to fears of an emerging bubble.
Widespread losses across the semiconductor sector
The downturn rippled across the broader chip industry. The Philadelphia semiconductor index dropped 7.2 percent, while SanDisk sank 13 percent, according to NBC News. Peer chipmakers including Advanced Micro Devices, Qualcomm, Marvell, and ARM Holdings each declined by about 10 percent.
The market retreat briefly spurred flight-to-safety demand for U.S. government debt, pushing Treasury yields down during Friday’s trading. Looking ahead, investors continue to watch whether technology giants can show that hundreds of billions of dollars in AI data center investments will generate meaningful revenue growth in early 2027.
