The last two weeks were supposed to bring some clarity to a stock market wobbling on a series of risks, particularly doubts about heavy spending on artificial intelligence, as a series of technology giants reported their earnings.
After seeing the numbers, the outlook is clearer. Unfortunately for Wall Street, it’s also considerably darker.
While earnings from the big AI spenders showed cloud-computing is still booming, investors weren’t impressed. Rather, they were focused on the mounting costs of the data center build out that’s eating into free cash flows, which triggered a steep selloff on Friday that pushed the tech-heavy Nasdaq 100 Index’s October decline to 6.7%, its worst month since the tariff freakout in March 2025.
Read More: What's fuelling the Nasdaq crash? AI spending fears, Intel rout and Anthropic debt concerns drive selloff
“This is a reflection of investors becoming more discerning, because I don’t think every hyperscaler is going to be a winner moving forward,” said Anthony Saglimbene, chief market strategist at Ameriprise. “It is all going to come down to, what are companies spending, how much are they getting back, and how deep are their moats, such that they can continue growing revenue.”