Nasdaq Tumbles 600+ Points as Amazon and Intel Earnings Trigger AI Spending Reckoning

What’s happening

The Nasdaq fell more than 2% Friday following disappointing earnings from Amazon and Intel, with Amazon shares down 7% and Intel plunging 25% in premarket trading. Alphabet also missed revenue expectations, stoking investor anxiety about whether massive AI infrastructure spending will generate sufficient returns. The selloff marks the Nasdaq's worst day since June.

Market impact

Chip stocks broadly declined 10%, with semiconductor exposure across the portfolio under pressure. The rout signals a pivot away from the AI-at-any-cost narrative that dominated markets through 2024, forcing a repricing of mega-cap tech valuations. Investors are now demanding proof that capital-intensive AI buildouts will translate to near-term profitability.

Broader implications

This earnings cycle represents a critical inflection point for the AI trade. If Amazon, Intel, and Alphabet—the infrastructure backbone of AI deployment—cannot demonstrate ROI on their spending, the entire sector's growth thesis faces structural challenges. Expect heightened volatility and sector rotation toward value and consumer stocks in coming weeks.