US tech stocks fall as investors question AI spending
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US tech stocks fell for a second straight day amid concerns about the hundreds of billions of dollars being spent on artificial intelligence. The BBC reported that Intel dropped 28% on Friday, Alphabet fell 1.4% after losing 12% the previous day, and the Nasdaq ended October with its worst monthly decline since March 2025. Reddit fell 29% after reporting weaker-than-expected daily-user figures and warning that Google’s AI-driven search was hurting referral traffic.
Meta, Alphabet, Oracle, Amazon and Microsoft have committed to spending $800bn on AI in 2026. Alphabet expects to invest up to $205bn this year, while Amazon has committed $220bn, including spending on data centres, network equipment and servers. Analysts cited by the BBC raised questions about the returns on those investments and the risk of an AI bubble.
Why it matters · editorial interpretation
The stock-market reaction indicates that investors are scrutinizing the expected returns from major AI investment commitments more closely. Questions raised by analysts cited by the BBC also focus attention on bubble risk and on companies such as Reddit depending on traffic from Google search.
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