The Pulse
AI Spending Fears Drive Nasdaq’s Worst Month Since March 2025
U.S. technology stocks sank on Friday, October 30, as investors weighed Big Tech’s AI infrastructure bills against uncertain returns. The Nasdaq fell 2.9% that day and recorded its worst month since March 2025.
AI.info Team · Written with AI · fact-checked ·
“We’re moving out of the hopes and dreams phase of the AI trade and into the ‘show me’ phase,”
Joe Tigay, portfolio manager at Equity Armor Investments, in a note to investors
U.S. stocks fell sharply on Friday, October 30, as investors questioned whether the enormous sums going into artificial intelligence infrastructure will produce returns quickly enough. The Nasdaq Composite dropped 2.9%, the S&P 500 fell 1.8% and the Dow Jones Industrial Average lost 1.1%. The tech-heavy Nasdaq had fallen more than 5% in October, its worst month since March 2025, according to The Information.
Intel’s forecast adds to the pressure
Intel shares plunged 28.6% on Friday, their steepest one-day drop since 1974, after the chipmaker forecast fourth-quarter profit below analysts’ expectations. The decline came despite Intel reporting a stronger profit for the latest quarter than analysts had expected. Weak guidance made the stock a conspicuous drag as investors were already reassessing the prices attached to AI-linked companies.
Nvidia fell 4.2%, the largest single force pulling the S&P 500 lower, according to the Associated Press. The selling extended beyond chipmakers: investors are weighing whether the AI buildout can generate enough profit and productivity to justify the hundreds of billions companies are committing. Higher interest rates add another concern, since they can make financing data-center projects more expensive and slow further construction.
Amazon’s $220 billion plan sharpens the question
Amazon’s latest results put a concrete figure on the scale of the investment. The company said it still expected 2026 cash capital expenditures of about $220 billion. In its SEC filing, Amazon reported $75.9 billion in cash capital expenditures for the third quarter, up from $34.2 billion in the same period a year earlier.
Those figures cover more than AI alone. Amazon said the spending primarily reflects technology infrastructure, most of it to support AWS growth, as well as added capacity for its fulfillment network. But the size of the commitment gives investors a direct test of the trade: cloud demand and AI adoption need to generate enough revenue over time to warrant the cost.
Investors want returns, not just bigger budgets
The selloff reflects a change in what shareholders are asking of large technology companies. Strong demand for computing has supported years of investment, but rising outlays have left investors more focused on the timing and durability of the payoff. A large spending plan can signal confidence in future demand; it can also raise questions about cash flow, financing and how much growth the investment must produce to earn its keep.
Friday’s losses came as market sentiment was already strained by earnings results and concerns about AI spending. The indexes finished near the day’s lows: the Nasdaq Composite closed at 25,437, the S&P 500 at 7,580.07 and the Dow at 51,770.31, according to AP. At Amazon, the investment line is already visible in the filings: $75.9 billion in cash capital expenditures in one quarter, with the company expecting about $220 billion for the year.