Wall Street slides as Intel rout deepens doubts over AI spending

Reporting Notes

Compared AP’s closing index totals with Reuters’ independently reported market wrap. Checked Intel’s fourth-quarter outlook and Amazon’s third-quarter cash-flow and capital-expenditure figures against both companies’ releases. Market explanations are attributed to reporting and investors; they do not establish a single cause or forecast future returns. Both images are licensed archive context: the NYSE in 2007 and Micron’s San Jose building in 2025; neither depicts Friday’s trading.

A sharp end to October trading

U.S. stocks fell sharply on Friday, with the S&P 500 down 1.8% to 7,580.07 and the Nasdaq Composite down 2.9% to 25,437.00. The Dow Jones Industrial Average lost 1.1%, closing at 51,770.31. The declines were the worst for the S&P 500 and Nasdaq since June, according to the Associated Press.

Intel shares plunged 28.6%, Reuters reported, after the chipmaker issued a fourth-quarter revenue forecast below analysts’ expectations. The fall spread across chipmakers and technology shares, while investors also weighed results from Amazon and other large technology companies.

Investors focus on the cost of AI growth

The market move renewed questions about how quickly heavy investment in artificial intelligence infrastructure can produce returns. Reuters reported that investors were reassessing the cash required for data centres and chips; that is an interpretation of the trading, not proof that the investments will fail.

Amazon’s figures show why the debate cuts both ways. The company said its cloud-computing unit’s third-quarter sales grew 39% from a year earlier, while free cash flow over the past 12 months swung to a $42.4 billion outflow, primarily because of higher equipment spending that it linked to AI. Amazon maintained an expected $220 billion in cash capital expenditure for 2026.

Micron’s building in San Jose, California — Photo: Malaysia Skyline · CC BY 4.0 — Archive context: Micron’s building in San Jose, photographed in 2025. The image is not related to Friday’s stock movements.

Intel outlook adds a separate warning

Intel forecast fourth-quarter revenue of $15 billion to $16 billion, compared with $16.5 billion in the third quarter. Its release also cited near-term headwinds across the PC industry. That outlook fell short of the forecasts analysts had set, according to AP and Reuters, prompting a steep repricing of the shares.

Friday’s losses do not by themselves show that AI demand has weakened across the economy. They show investors reacting to the gap between rapidly rising infrastructure costs and uncertain timing for returns, even as Amazon reported strong cloud growth and Intel reported higher year-on-year quarterly revenue.