Tech shares slide as investors question returns on AI spending
Original report: date unavailable
US technology shares fell for a second session as hefty AI investment plans collided with disappointing earnings and operating figures. Intel and Reddit suffered steep losses, while investors scrutinised whether spending by major technology companies would deliver sufficient returns.
US technology stocks extended their losses on Friday, with Intel falling 28% and Reddit dropping 29%, according to BBC News. The Nasdaq closed 2.8% lower and recorded its weakest monthly performance since March 2025. Alphabet lost another 1.4% after a 12% decline on Thursday, while Amazon also finished 1.4% lower.
The sell-off came as investors assessed large AI spending commitments alongside weaker business indicators. Meta, Alphabet, Oracle, Amazon and Microsoft have committed a combined $800bn for 2026, the report said. Intel forecast quarterly revenue below expectations amid slowing computer demand, while Alphabet reported that AI-generated search answers were affecting its core search advertising revenue.
The report describes pressure on both the cost and revenue sides of the AI expansion: companies are investing heavily in infrastructure, while Alphabet and Reddit report effects on advertising or referral traffic. However, the declines do not establish a market-wide collapse; the Nasdaq remained 7.8% above its level a year earlier.
Source
BBC News
AI-assisted news digest · May be published automatically without editorial review.