United States technology stocks drop as artificial intelligence costs rise

United States technology stocks tumbled for the second day in a row on Friday over worries about massive corporate spending on artificial intelligence, the BBC reported. The tech-heavy Nasdaq index sank by more than 3.5 percent to reach its lowest level in over two months. [1]

Shares in Intel fell by as much as 30 percent on Friday, according to the BBC. This followed a stock price drop for Google owner Alphabet that wiped out more than 500 billion dollars in value during the previous trading day. Other technology companies including Reddit and Amazon also experienced share price declines. [1]

The latest market drops follow lower financial results across the sector. As FTMQ News reported earlier, Amazon missed analyst expectations for quarterly revenue and profit, while Intel issued a lower earnings forecast due to weak demand for personal computer processors and supply issues. Alphabet shares fell over 12 percent in after-hours trading after advertising revenue growth slowed down. [1][3]

The technology sell-off had previously spread to international markets earlier in the month. As FTMQ News reported earlier, South Korea's Kospi index fell 7.7 percent and Japan's Nikkei 225 dropped 4.8 percent on 15 October after higher United States inflation data triggered initial drops in tech shares. [2]

Investors are increasingly worried because massive spending on artificial intelligence is nearing one trillion dollars while company earnings fail to consistently meet expectations, the BBC reported. These growing financial gaps have raised market fears that an artificial intelligence bubble may be forming. [1]