Shares in Intel cratered 28% on Friday and Reddit suffered the worst trading day in its history, as a second straight session of heavy technology-stock selling dragged the Nasdaq Composite to its worst month since March 2025. The rout extended a reckoning that began Thursday, when a hit to Alphabet's own search-advertising business from its AI summaries wiped more than $500 billion off the Google parent's market value in a single day.
By Friday's close, Alphabet shares had slipped a further 1.4% and the Nasdaq finished the session 2.8% lower. Reddit tumbled 29.22%, its steepest one-day drop since the company's 2024 initial public offering. Roblox fell 18% on weaker daily active user numbers, and Amazon, which had briefly recovered some of Thursday's losses, still ended the day down 1.4%.
Intel's chip gains aren't enough
Intel's slide came even though the chipmaker beat Wall Street's headline estimates. Its third-quarter earnings release showed revenue of $16.5 billion, up 21% from a year earlier, with data-center and AI revenue climbing 78% to $7.32 billion. What spooked investors was the outlook: Intel guided to fourth-quarter revenue of just $15 billion to $16 billion and non-GAAP earnings of 25 cents a share, both below what analysts had modeled.
Chief financial officer David Zinsner told analysts on the earnings call that the company did not expect to bring in more cash than it spent this year.
Looking ahead, we see the PC slowdown continuing at least through the first half of next year.
David Zinsner, Intel chief financial officer
Zinsner said Intel's equipment spending had already ramped up sharply in the third quarter and would be "even more significant" in the current one — the kind of open-ended capital commitment that has made investors increasingly nervous across the AI-infrastructure trade. Meta, Alphabet, Oracle, Amazon and Microsoft have together committed to roughly $800 billion in AI spending for 2026, a sum that is beginning to show up in weaker free cash flow across the group even as revenue keeps climbing.
Investors turn ruthless
Reddit's own third-quarter results told a similar story of strong headline growth undercut by a soft outlook. Revenue rose 53% to $895 million, but the company guided to fourth-quarter revenue of $1.00 billion to $1.03 billion, short of the roughly $1.05 billion Wall Street wanted. Globally, daily active unique visitors still rose 12% from a year earlier to 130.3 million, a reminder that growth has not stalled everywhere. But domestic daily active users fell 1.7% from a year ago, and the company acknowledged that Google's AI-generated search summaries are increasingly answering queries without sending readers to Reddit itself.
Chris Low, an economist at FHN Financial, told the BBC that the broader selloff reflected strain building up across the biggest AI spenders.
Amazon and Google are showing some pretty significant growing pains as they aggressively pursue the AI build-out. The thinking is that these signs suggest that the entire sector is going to slow down.
Chris Low, FHN Financial
Kathleen Brookes, research director at the trading firm XTB, said investors who had tolerated years of heavy AI spending were losing patience.
Investors have turned ruthless, punishing any signs of disappointment in third-quarter earnings. The AI trade has had a good run in recent years, but now investors want payback, and companies like Alphabet and Intel are in the crosshairs.
Kathleen Brookes, XTB
The scrutiny of AI's price tag has spilled into corporate governance as well this week, in a sister newsroom's look at how Meta's own AI financing push ran into a shareholder lawsuit over Zuckerberg's new share class.
Brookes noted that November is typically a strong month for stocks, and said the coming days would be telling. If AI stocks continue to struggle, she said, it could suggest the trade is past its peak and that investors will go looking for a new theme to drive markets.
