US stock markets came under renewed pressure on Friday as investors grew increasingly concerned about the rising costs of artificial intelligence infrastructure and the impact of heavy technology investments on corporate earnings.
The technology-heavy Nasdaq Composite opened 2.5 per cent lower, touching its weakest level in more than two months, as losses across major technology companies dragged down market sentiment.
Chipmaker Intel witnessed some of the steepest losses, with its shares falling as much as 30 per cent in early trading. The decline followed the company’s latest earnings update, in which it warned of continued weakness in the personal computer market and projected lower-than-expected revenue for the fourth quarter.
Intel’s Chief Financial Officer David Zinsner said the company did not expect to generate positive cash flow this year. He also indicated that the slowdown in the PC market could continue through at least the first half of next year.
Despite the weaker outlook, Intel plans to increase investments in artificial intelligence-related infrastructure and equipment. Zinsner said capital spending had risen significantly in the third quarter and was expected to increase further in the final three months of the year.
Amazon shares also declined, falling as much as 6 per cent before recovering some losses, after its quarterly earnings released on Thursday failed to meet investor expectations.
Other technology companies, including Reddit and Roblox, also witnessed selling pressure, adding to the broader decline in the sector.
Meanwhile, Alphabet, the parent company of Google, continued to face pressure after losing more than USD 500 billion in market value on Thursday. Investor concerns intensified following disclosures that AI-generated summaries were affecting the company’s core search advertising business. Its shares fell another 1 per cent in early trading on Friday.
Intel’s decline also threatened to erase more than USD 130 billion from its market valuation, reflecting growing investor concerns over the company’s financial outlook and rising expenditure.
