Investor concerns over rising costs of the AI buildout intensified on Friday after Amazon and Intel reported disappointing earnings this week, leading to questions about whether the massive investments powering the boom will pay off.
Shares in Amazon fell more than 12 per cent after it reported a cash burn of more than $42 billion over 12 months through September, according to its third-quarter report on Thursday, roughly double its previous record in 2022.
Intel fell more than 25 per cent and was on track for its worst day in more than five decades after the chipmaker issued a weak fourth-quarter forecast and warned of a slowdown in the PC market.
The tech-heavy Nasdaq Composite fell 2.18 per cent during morning trading on Wall Street, with the S&P 500 down 1.15 per cent. The Dow Jones Industrial Average fell 205.84 points, or 0.39 per cent.
“The broader technology sell-off reflects growing scrutiny of hyperscalers’ spending plans and the debt burden of AI infrastructure providers,” Vijay Valecha, chief investment officer at Century Financial, wrote in a note.
