Nasdaq 100 Loses Over $1.3 Trillion as Intel Crashes 30% and AI Spending Fears Spread Across Tech Sector

A wave of brutal earnings reactions sent the Nasdaq plunging more than 2% on Friday, erasing over $1.3 trillion in value from the Nasdaq 100 in a single session as investors grew increasingly alarmed that Big Tech is burning through hundreds of billions of dollars on AI infrastructure without generating the cash returns to justify it. The selloff accelerated into one of the most damaging days for the technology sector in decades.

Intel led the carnage, falling nearly 30% to mark its worst single-day decline since July 1974, wiping out roughly $137 billion in market capitalization. The collapse was triggered by a disastrous fourth-quarter revenue outlook of $15 billion to $16 billion, roughly $1.1 billion below the $17 billion analysts had expected, with earnings-per-share guidance of $0.25 against an anticipated $0.43. Bloomberg Intelligence attributed the miss to a deepening PC slump and supply constraints on CPUs, which overshadowed improving data center demand. Options flow turned sharply negative, with net calls shedding $246 million while puts gained $58 million.

Google parent Alphabet fell roughly 13% to 14%, losing nearly $500 billion in market value, after reporting 25% year-over-year revenue growth that was overshadowed by free cash flow turning negative by $9.1 billion against expectations of roughly breakeven. Amazon dropped around 10% after revealing plans to spend $220 billion in capital expenditure this year, predominantly on AI infrastructure, with even higher outlays projected for 2027. That spending push swung Amazon's annual free cash flow from positive $14.8 billion to negative $42.4 billion in just 12 months. AWS revenue grew 39%, its fastest pace in nearly five years, but investors focused on the cost trajectory. Reddit cratered 28% after its CEO disclosed that Google's AI search product was driving significantly less traffic to the platform.

The damage spread broadly across the semiconductor sector. Chip stocks collectively shed roughly $1 trillion in value, with SanDisk falling about 15% despite reporting 378% year-over-year revenue growth that beat expectations, as investors flagged a deceleration in quarterly growth from 51% to 23%. Micron dropped around 5%, SK Hynix fell over 7%, Dell sank 11%, HP fell 9%, and Hewlett Packard Enterprise and Super Micro each lost about 7%. Qualcomm, Arm, Broadcom, Lam Research, and the iShares Semiconductor ETF all declined sharply. The selloff put the Nasdaq on track for a monthly loss and prompted analysts and traders to debate whether the AI investment supercycle had reached a reckoning point.