Tech stocks are falling as investors worry about the massive costs of artificial intelligence and disappointing corporate earnings.
Tech stocks faced a second day of heavy losses recently. Investors worry about the massive amounts of money companies spend on artificial intelligence.
Also, Intel shares dropped by 28% on Friday. Meanwhile, Google owner Alphabet saw its value fall further following a large decline on Thursday.
Next, other companies like Amazon and Reddit also experienced falling stock prices. The Nasdaq index finished October with its worst monthly performance since early 2025.
However, many firms continue to spend billions on AI development. Meta, Alphabet, Oracle, Amazon, and Microsoft plan to spend $800 billion by 2026.
As a result, some investors fear an AI bubble is forming. Earnings from these tech giants are not meeting high market expectations lately.
For example, Alphabet lost $500 billion in market value. Their new AI search summaries appear to hurt their core advertising revenue.
Still, Intel continues to increase its AI spending. The chip maker struggles with weak demand for personal computers, which lowers its overall income.
Then, Amazon revealed it spent much more money than it earned recently. The company plans to put $220 billion into AI data centers and servers.
Meanwhile, Reddit shares plunged by 29% after reporting disappointing user numbers. The platform also warned that Google's search tools reduce its web traffic.
Finally, experts say investors have become very strict about company performance. They now demand clear proof that AI investments will generate real profit soon.