US stocks tumbled on Friday, with the Nasdaq suffering its largest one-day percentage drop since June 5 following disappointing quarterly results from Intel and Amazon, which amplified growing worries surrounding AI-related companies' massive spending on the nascent technology.
All three major US stock indexes slumped, with the Nasdaq sliding 2.9%. The tech-heavy index has dropped 7.8% from its all-time closing high reached on October 6.
The tech rout was sparked by disappointing quarterly results from Intel and Amazon released late on Thursday. While Amazon pared losses as the session progressed, Intel shares plunged 28.6%.
Chip stocks veered sharply lower, with Nvidia down 4.2% and AMD sliding 10.9%. The broader chips index (.SOX), opens new tab shed 7.2%, slumping to a monthly loss of more than 15%. Server makers Dell and HP dropped 10.8% and 9.6%, respectively.
"It's fair to say that this week, not just today, has been very much about the future of AI and what that's going to look like, whether there will be a positive return on investment and if so, how quickly," said Oliver Pursche, senior vice president at Wealthspire Advisors in New York.