Nasdaq hits two-month low after Amazon and Intel AI spending warnings
The Nasdaq Composite fell more than 2 per cent at the open on Friday, reaching its lowest level in over two months. The decline followed Amazon's aggressive AI investment plan and Intel's warning of heavy cash burn, deepening investor worries about the soaring costs of AI infrastructure and uncertai
The Nasdaq Composite opened at its lowest level in more than two months on Friday, after Amazon's aggressive artificial-intelligence spending plan and Intel's warning about cash burn intensified investor concerns over the escalating costs of AI infrastructure and the timeline for returns.
The Dow Jones Industrial Average rose 41.3 points, or 0.08 per cent, to 52,383.9 at the open. The S&P 500 fell 89.3 points, or 1.16 per cent, to 7,631.07, while the Nasdaq Composite dropped 592.2 points, or 2.26 per cent, to 25,592.486, according to Reuters.
The sharp decline on the tech-heavy Nasdaq came as investors reacted to Amazon's latest spending plans, which signalled a continued and aggressive push into AI development despite already high capital expenditure. Intel, meanwhile, added to the gloom with its own warning about significant cash burn as it invests heavily in AI-related chip manufacturing and infrastructure.
The combined signals from two of the largest players in the technology sector have heightened worries on Wall Street that the massive buildout of AI computing capacity is becoming increasingly expensive, while the timeline for generating meaningful returns remains uncertain. The sell-off on Friday reflects a growing scepticism among investors about whether the huge sums being poured into AI will pay off in the near term.
Market participants will now be watching closely for further corporate earnings reports and forward guidance from other major technology firms, as the sector grapples with the financial pressures of the AI arms race.