Markets

After Google’s Crash, Intel Plunges 29% as A.I. Fears Hit Tech Stocks

co-produced by AI30. October 2026, 18:59

Stock market candlestick chart with red and green bars on a dark screen — Fears about A.I. spending have triggered a global sell-off in tech stocks. © Maxim Hopman/Unsplash

First Google, now the entire sector. A day after Google’s stock had its worst day since its I.P.O., the sell-off spread across the tech industry on Friday. Disappointing results from Amazon and Intel deepened investors’ doubts about whether the A.I. boom can last. The tech-heavy Nasdaq 100 fell 3 percent in early trading, according to The Financial Times, while the broader S&P 500 lost 1.6 percent. In the afternoon, the Nasdaq 100 was down 3.2 percent at 28,453 points and the Dow Jones Industrial Average was down 0.9 percent at 51,955, according to the German business daily Handelsblatt. According to the German news agency dpa-AFX, the Nasdaq 100 fell to its lowest level since early August and was on track to lose more than $1 trillion in market value in a single day.

Stefan May, an investment strategist at Germany’s Quirin Privatbank, said the A.I. euphoria was starting to show cracks. In a strategy paper, DZ Bank summed up the new mood in the market: Good results alone are no longer enough.

Intel on Track for Its Worst Day Since 1974

Intel was hit hardest. The chipmaker’s shares plunged as much as 30 percent, putting them on track for their worst trading day since 1974. That also hurts the U.S. government, which holds a 10 percent stake in Intel. The trigger was weak guidance: Intel expects revenue of $15 billion to $16 billion (€13.5 billion to €14.4 billion) for the current quarter, according to Forbes, while analysts had expected $17 billion. The company also warned that its “significant, long-term and inherently risky investments” in research and manufacturing might not produce a “favorable return.” Ironically, high memory-chip prices are part of the problem: They are weighing on PC sales, an important business for Intel, according to Handelsblatt. The company does not expect an improvement until at least mid-2027.

Analysts reacted accordingly. Timothy Arcuri of UBS said Intel’s revenue target fell short of even the most pessimistic estimates, according to dpa-AFX. Srini Pajjuri of RBC called the third quarter pleasing but said the outlook disappointed because of the weak PC business, which strength in data centers and A.I. could not offset. Bank of America dropped its buy recommendation, and Citigroup described the report as two steps forward and one step back. The Philadelphia Semiconductor Index, which tracks the major U.S. chipmakers, fell 7.1 percent.

Amazon also disappointed. The company reported third-quarter revenue of $201.9 billion (€181.4 billion), up 12 percent but slightly below expectations. At the same time, Amazon spent $77.3 billion (€69.5 billion) on capital expenditures, mostly for data centers. According to Stephen Ju of UBS, sales at the cloud unit AWS were the main disappointment. The stock fell as much as 8 percent before paring its losses to about 2 percent, according to Handelsblatt. “The market has no tolerance now for misses on top/bottom line guidance, regardless of the reason,” said Bob Lang, founder and chief strategist of Explosive Options.

The Fear of A.I. as a Cash Furnace

Behind the sell-off lies a fundamental question: Will the enormous investments in A.I. infrastructure pay off? “The AI race is getting very, very expensive,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank. On Thursday, Google reported a second straight quarter of burning more cash than it generated, and Alphabet’s shares fell about 13 percent by the close, wiping out about $500 billion (about €449 billion) in market value. At the same time, tech giants are increasingly raising fresh money in capital markets. Meta, for example, is planning a record share sale of up to $97.5 billion.

“The combination of deteriorating cash flows and rising capital commitments means the debate over whether AI returns can ultimately justify the scale of investment may not be resolved any time soon,” said Emmanuel Cau, head of European and Apac equity strategy at Barclays. He added: “The direction of travel into next year should naturally be towards slower earnings growth.” Analysts at Vital Knowledge even warned of a “negative feedback loop”: “Gloomy psychology impairs the ability of companies to raise debt and equity, which could further pressure data centre spending.”

Hedge funds are adding to the pressure. They had built up big bets on the so-called Magnificent Seven ahead of earnings season and are now violently unwinding those positions, according to Charlie McElligott, a strategist at Nomura. His explanation: “Bonuses are being determined. If [a hedge fund] takes a stupid drawdown late in the year, in a market like this, you blow yourself up. You’re incentivised to take risk off the table.”

From Tokyo to Amsterdam

The sell-off was not limited to the United States. In Japan, the Nikkei 225 closed down 2.1 percent, and the OpenAI investor SoftBank fell 6 percent, leaving it 48 percent below its June peak. “The major tech names are entering a no man’s land where they become uninvestable,” said Neil Newman, a Japan equity strategist at Astris Advisory in Tokyo. In South Korea, the memory-chip makers Samsung and SK Hynix fell 3 percent and 7.1 percent, and the Kospi index lost 3.5 percent. In Europe, the Dutch chip equipment maker ASML fell 4.9 percent.

Crypto stocks are also under pressure. After the record hack at Binance, Coinbase lost 12.7 percent on Thursday and Robinhood 8.4 percent. Oil prices are adding to the strain: A barrel of Brent crude cost $118 (about €106), its highest level since April, as investors feared a new escalation in the conflict between the United States and Iran. Gold and silver, on the other hand, fell to their lowest prices in a year, according to Handelsblatt.

What Argues Against the End of the A.I. Boom

Some numbers, however, argue against the end of the A.I. boom. Among the Magnificent Seven, Apple, Microsoft and Nvidia are still up for the year. And demand for A.I. is there: Amazon’s cloud unit AWS grew 39 percent in the third quarter to $46 billion (€41.3 billion). According to JPMorgan, the big tech companies will spend about $900 billion (about €809 billion) on A.I. this year, money that turns into revenue for chip and infrastructure providers. Memory-chip makers, for example, stand to benefit from the same high prices that are hurting Intel: “High memory prices and tight supply are here to stay, at least through the first half of 2027,” said Hendi Susanto, a portfolio manager at Gabelli Funds.

Some analysts remain optimistic. Dan Ives of Wedbush reiterated his Outperform rating on Amazon after the results, with a price target of $300 (about €270). And despite his skepticism, Mr. May of Quirin Privatbank warned against hastily reshuffling portfolios out of fear of a crash or an A.I. bubble.

Hank Calenti, a strategist at SMBC, sees a repricing more than a collapse: “Expectations built into prices are being challenged and are now resetting. The weakness is due to a combination of some firms not earning as much as expected and others spending more on capex than forecast.” Ecaterina Bigos of BNP Paribas Asset Management sees mainly a question of pace: “The market is questioning a lot more the pace of implementation of capital expenditure and bottlenecks are becoming clearer.”