Nasdaq slides 2.2% as Big Tech earnings fail to reassure investors

US tech stocks Nasdaq fell sharply on Friday as traders moved out of the tech to the broader market in the wake of the disappointing earning reports and large AI capex of major tech giants. Nasdaq lost 2.2%, while the blue-chip Dow was down 155 points, or 0.4%, and the S&P 500 slid 1.2%. Intel was down by nearly 29%, Alphabet was down by 1% after a record beating of 12% in Thursday's closing session, and Amazon was down by 6.5% in the pre-market hours.

Alphabet's 12% drop on Thursday erased roughly half a trillion dollars in its market value. It was the worst single-day percentage drop in Alphabet's history since it first went public in August 2004 and the second-largest single-day wipeout in history, after Nvidia’s nearly-$600 billion slide in early 2025. Alphabet's quarterly sales figure on Wednesday missed Wall Street expectation, the company's cash cow Google search advertising business showed a slowing growth, and two consecutive quarter of negative free cash flow, which have never happened since August 2004. Alphabet reported $51.4 billion in capital expenditures in the third quarter alone, driven by AI and data centre spending.

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Amazon also suffered a similar story as its AWS revenue continues to grow, but its AI capex spending overshadowed the broader growth, as CEO Andy Jassy said he expected capital expenditures to ​be "meaningfully more" next year, compared with 2026. Intel also warned that it would burn more cash this year due to ​a weak market for personal computers, manufacturing bottlenecks and heavy spending to expand production.

Many of these companies have tapped into the bond market to meet the need for AI financing, raising concerns as higher interest rates will make the spending harder to justify.

Meanwhile, several tech companies are rushing to raise aggressive capital from Wall Street. Anthropic, the maker of Claude AI, is reportedly seeking to raise $100 billion in working capital and compute needs from its IPO in November. It has already filed its public Form S-1 registration, reporting massive revenue growth of over 1300% and a loss of more than $80 billion in the first half of 2026. On the same day, Meta announced that it will seek $95 billion in an equity sale to raise capital for purchasing Nvidia, AMD, and Broadcom chips. Similarly, on the same day, SpaceX carried out a $40 billion debt financing round.