Nasdaq Drops 2.9% as Intel’s Record Plunge Deepens AI Selloff

The update

U.S. tech stocks sold off sharply on Friday, with the Nasdaq Composite falling 2.86% to 25,437 — its worst one-day drop since June 5 — while the S&P 500 lost 1.82% and the Dow fell 1.09%. Intel led the decline, plunging about 29% in its worst session in decades after forecasting fourth-quarter revenue of $15 billion to $16 billion, well below the roughly $17.1 billion analysts expected. The guidance overshadowed a third-quarter beat — revenue of $16.51 billion and adjusted earnings of $0.52 per share against $0.40 expected. Amazon also weighed on sentiment after reporting a trailing-year free cash flow outflow of $42.4 billion as AI infrastructure spending mounted, and the selling spread across chipmakers, with AMD down about 11% and Nvidia down about 4%.

Why it matters

The selloff marks a shift in how markets judge the AI buildout: spending is no longer rewarded on its own. Intel’s miss turned a general worry — that hundreds of billions in AI capital expenditure may not earn its cost — into a specific, reported failure from a bellwether chipmaker, and Microsoft’s $25 billion bond sale this week underlined how the buildout is increasingly debt-funded. Money rotated toward defensive and energy stocks, six of the S&P 500’s eleven sectors actually rose, and the Nasdaq closed October down about 5%, its steepest monthly fall since March 2025.

What to watch

Whether chip stocks hold Friday’s lows when markets reopen Monday; guidance from the next wave of semiconductor earnings; and any sign that the biggest AI spenders are slowing capital expenditure plans.

Sources

• invezz.com — confirming the Nasdaq’s 2.86% fall, Intel’s guidance miss and Amazon’s cash flow figures
• fxstreet.com — confirming Intel’s third-quarter beat, its fourth-quarter guidance and the sector-wide chip selloff