US technology stocks ended October on a weak note as investors reassessed the scale of artificial intelligence-related spending by major technology companies. The Nasdaq Composite recorded its biggest daily decline since June on Friday, October 30, as a broad selloff affected technology stocks and other risk assets.
Chipmaker Intel and social media company Reddit each fell 29%, while Sandisk, a major beneficiary of the AI-related capital spending boom, declined 13%.
The selloff followed declines among major technology companies involved in AI infrastructure development. Shares of Microsoft, Meta Platforms, Amazon and Google parent Alphabet fell between 1% and 2% on Friday, following significant losses earlier in the week.
The four major cloud and technology companies, often referred to as hyperscalers, accounted for more than a third of the capital spending undertaken by the current constituents of the S&P 500 over the preceding 12 months, according to Capital Economics. Their share of spending is expected to increase further, adding to investor concerns.
“Now that the combined capital spending boom at the hyperscalers is becoming partly dependent on external financing, investors are becoming more nervous about the sums they are collectively investing and how they are doing it,” said John Higgins, a markets economist at Capital Economics.
The Nasdaq 100 index of large non-financial stocks fell 3.5%, putting it close to correction territory, which is generally defined as a 10% decline from a recent high. The Nasdaq Composite was down 7.8% from its closing high after its worst month since March 2025 reduced a portion of its gains from the AI-driven rally.
“Investors are voting all of a sudden and all together on who will monetize the investment and who won’t,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
The decline extended beyond technology stocks. Silver fell 6%, taking its decline for 2026 to 31%, while gold dropped 3.5%, leaving it down 10% for the year. Financial stocks also came under pressure, with Goldman Sachs falling 4% and Jefferies declining 6%. Bitcoin lost 3% after hackers stole more than $6 billion from Binance.
However, some market participants viewed the decline as a correction following the strong gains recorded across technology stocks. “I don’t think it’s a particularly troublesome leverage issue that we’re dealing with. We’ve had such a huge move up in the whole complex,” said Sahak Manuelian, managing director for global equities sales and trading at Wedbush Securities.
The market decline has renewed attention on how technology companies plan to finance their AI infrastructure investments and generate returns from the spending.
