Tech stocks linked to artificial intelligence (AI) fell for a second consecutive day on Friday, October 30,2026. Investors are questioning the future profitability of the hundreds of billions of dollars invested in this technology. The S&P 500 declined by 2.3%, and the Nasdaq Composite by 3.5%.
Intel plunged 30.7%, nearing its worst day since its founding in 1972. The chipmaker issued profit forecasts for the final quarter of the year that fell short of analyst expectations, despite having reported earnings above forecasts for the previous quarter. Its CEO, Lip-Bu Tan, stated that the personal computer sector continues to face pressure. Nvidia, a chipmaker that has become the symbol of the AI craze, fell 4.9%, a decline that the source presents as the main factor in the S&P 500’s drop, even more so than Intel.
The day before, Alphabet’s stock had fallen more than 12%, marking its worst day in history. The group, which owns Google and YouTube, announced it spent more cash over the summer than in the spring, citing massive similar investments in AI. Amazon fell 1.9%, after summer earnings missed forecasts. According to the source, the company consumed $42.4 billion in cash over the past 12 months, based on a metric called ‘free cash flow, ‘ and spent $94.8 billion on capital expenditures, primarily on AI technologies.
A Broader Concern
These fears echo warnings from the International Monetary Fund (IMF) that the massive debt taken on by tech giants to finance their AI-dedicated data centers poses serious risks to the global economy. According to the institution, while hyperscalers, these large data center operators, generate large profits, their free cash flows are rapidly shrinking. Their cumulative debt exceeds $1.3 trillion, and their off-balance-sheet commitments are around $3 trillion.
Investors are now questioning whether these hundreds of billions will generate enough profit and productivity to make the investment worthwhile. Joe Tigay, portfolio manager at Equity Armor Investments, noted in a message to investors that the sector is ‘moving from the phase of hopes and dreams’ to one where it must ‘prove itself.’ The U.S. stock market is now just 3.4% off its all-time high, but it has become increasingly volatile, just days before the midterm elections scheduled for Tuesday, November 3 in the United States.
Cryptocurrencies and Bonds
In the cryptocurrency market, prices fell after the hacking of Binance, described as the world’s largest cryptocurrency exchange platform. Bitcoin fell below $77,000, after exceeding $86,000 at the start of October. A U.S. company specializing in blockchain analysis believes a North Korean entity is likely behind the attack, which resulted in the loss of over $6 billion in cryptocurrencies. Coinbase Global fell 13.6%, despite quarterly results beating forecasts, while Strategy, which claims to hold about 4% of the total bitcoin supply, declined 8.3%.
In the bond market, the 10-year Treasury note yield fell to 4.93%, from 4.98% on Thursday evening, October 29. Conversely, Brent crude rose 2.4% to $113.43 per barrel. In Asia, South Korea’s Kospi lost 3.5%, while Japan’s Nikkei 225 fell 2.1% after the Bank of Japan decided to keep its rates unchanged. Meanwhile, the STAR50 index, which groups leading AI and semiconductor companies in mainland China, has lost 40% in less than four months, representing about $480 billion in market capitalization. For a Beijing-based fund manager, this collapse results from a frenzied speculative race.
It remains to be seen whether these tremors herald a historic-scale crash. According to an analyst at MacroStrategy Partnership, the AI bubble would be 17 times larger than the dot-com bubble of the early 2000s and four times larger than the subprime bubble. Others, however, see it as a transformation rather than a bubble.
