Wall Street's technology-led rally is facing a reality check, with a sharp sell-off in tech stocks raising questions over whether the artificial intelligence (AI) boom that has powered the equity bull market has run too far.
Disappointing earnings and aggressive AI spending plans triggered the worst decline in US stocks since June on Friday. The Nasdaq 100 plunged 3.5%, briefly crossing the threshold for a technical correction, while the S&P 500 fell 1.8% and breached its 100-day moving average.
Read More: What's fuelling the Nasdaq crash? AI spending fears, Intel rout and Anthropic debt concerns drive selloff
Intel Corp. slumped 29%, its steepest fall in more than four decades, after a weak sales forecast. The sell-off spread to other chipmakers, including Nvidia Corp. and Broadcom Inc.
Amazon.com Inc. and Alphabet Inc. also declined after sticking with aggressive AI investment plans even as their core businesses showed signs of slowing.