Wall Street Tumbles as AI Spending Concerns Spark Broad Tech Selloff

Wall Street suffered its worst day since June on Friday as investors questioned whether massive AI spending will deliver expected returns. The Nasdaq Composite fell 3.8% and the S&P 500 dropped 2.5%, while the Dow lost 770 points, or 1.5%. Intel plunged more than 30% after issuing weak fourth-quarter guidance, citing PC market weakness and manufacturing bottlenecks. Nvidia fell 5.6% and a key chipmaker index sank 9%. Amazon slipped 2% on rising AI spending, while Alphabet extended Thursday's 12% decline with another 1.5% drop. Alphabet, Microsoft, Meta and Amazon are collectively spending hundreds of billions on data centers, but investors increasingly demand tangible returns. Google posted two consecutive quarters of negative free cash flow for the first time on record, and Meta disclosed its first negative free cash flow quarter since 2012. Amazon reported negative free cash flow of $42.4 billion over the past 12 months. The Nasdaq is now down almost 9% from its record high earlier this month, while the S&P 500 is down 3.5%.