Business2 min
Wall Street tech stocks slide as investors question AI spending bills
Big Tech keeps pouring billions into AI data centres, but shareholders want proof the payoff is coming fast enough.
Technology stocks took a beating on Wall Street this week, as investors worried that the huge sums Big Tech is spending on artificial intelligence may not turn into profits fast enough. Friday brought the heaviest selling and dragged major US indices lower.
The weekly numbers tell the story. The S&P 500 lost 43.61 points, or 0.6%, while the Dow Jones Industrial Average slipped 444.85 points, or 0.9%. The Nasdaq Composite shed 518.34 points. The Nasdaq 100 fell 6.7% in October, its worst month since March 2025, when tariff uncertainty rattled markets.
Here is the puzzle: the earnings were not bad on growth. Cloud computing and AI-linked businesses kept expanding. But investors looked past that and fixed on the bill. Giant cloud firms, known as hyperscalers, are spending billions on data centres, advanced chips, servers and networking gear to run AI services.
Think of it like a restaurant that keeps adding branches while diners queue up. Fine, until the cash runs thin. Shareholders now want to see steadier revenue, stronger margins and healthier free cash flow, the money left after a company pays for its investments.
Alphabet drew particular attention. Its results showed disappointing sales growth in core search and a second straight quarter of negative free cash flow, something it had not reported before as a listed company. It spent more than $50 billion on infrastructure and other capital investments in the quarter.
Amazon also stung investors. Its e-commerce growth was the weakest in three years, and over the past year it spent roughly $42 billion more on capital investment than its business generated in cash, largely for AI-related data centres and equipment. Its shares fell 5.6% across Thursday and Friday, the worst two-day run since July. Meta Platforms has dropped about 12% since its October 21 results, which showed a sharp rise in planned capital spending.
The worry is not limited to the US. Groww noted that China's tech-heavy STAR 50 Index fell 24% in the past month and sits 40% below its June peak. Groww said it was too early to say whether this marks a lasting shift in how investors view tech. For everyday investors, the lesson is simple: the AI boom is still running, but the market is now asking for receipts.
Read the original report on Livemint.
FiledArtificial IntelligenceUnited StatesStock MarketMicrosoftAmazonGoogle
