Wall Street closes sharply lower as AI cash burn fears spark tech selloff

What happened

US stocks fell sharply on Friday after weak quarterly results from Intel and Amazon increased worries about heavy spending on AI. The Nasdaq dropped 2.9%, its biggest one-day percentage fall since June 5, and sat 7.8% below its October 6 record closing high.

Confirmed

Global impact / market context

Investors are questioning whether large AI spending will produce returns quickly enough. When Amazon and Intel disappoint, money leaves costly technology bets and moves toward companies already delivering results, which pressures chip makers, server builders and any firm tied to AI hardware demand.

Analyst inference

All three main US indexes declined, with chip stocks hit hardest: Intel sank 28.6%, AMD fell 10.9%, Nvidia lost 4.2%, and the chips index dropped 7.2%. Dell and HP also fell, showing the selloff spread from AI software hopes to the hardware suppliers selling servers and chips.

Analyst inference

What to watch

1. Intel shares plunged 28.6%, Nvidia fell 4.2%, AMD slid 10.9%, Dell dropped 10.8% and HP fell 9.6%, so watch whether these steep losses continue or steady in coming sessions. Confirmed
2. Watch upcoming AI-related company results for signs that heavy spending is turning into profit, because the article says investors want a positive return on investment and want it quickly. Proposed
3. Watch whether the Nasdaq extends its 7.8% drop from the October 6 record high, since a deeper fall would signal investors are reducing exposure to expensive technology and chip stocks. Analyst inference

Evidence

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