US Tech Stocks Slide as Investors Question How AI Spending Will Be Financed

Technology stocks fell sharply on US markets on Friday, 31 October, as investors grew more worried about the cost of developing artificial intelligence (AI) and how that spending is paid for. The industry needs trillions of dollars, and companies are covering a growing share with borrowed money.

Index and company results

The Nasdaq, a US stock index heavily weighted toward technology companies, dropped 2.86%, ending its worst month since the spring of 2025. The S&P 500 lost 1.82% and the Dow Jones 1.09%.

Shares of chipmaker Intel fell nearly 30% after it published quarterly results, the biggest one-day drop in the company's history. Results from Amazon and Alphabet, Google's parent company, also fell short of investor expectations. Amazon's sales rose 12% over the year to $202 billion, but this was below forecasts, and its free cash flow turned negative for the first time. Its shares fell 5%. In October, Meta shares lost more than 15% of their value, Nvidia more than 10% and SpaceX about 10%.

Borrowing becomes the key question

AI requires data centres, servers, chips and electricity, and the investment must be made well before revenue arrives. According to JPMorgan estimates, about $1.6 trillion has gone into AI infrastructure since 2023, and annual investment could reach $1 trillion over the next decade. This year roughly a third of big tech spending is expected to be funded with debt; Goldman Sachs estimates that just four large companies could issue bonds worth about $250 billion.

Lenders have not turned away so far, but the US government competes for money in the bond market, and the 10-year Treasury yield stood at 4.93% on Friday. CoreWeave, a smaller cloud company that rents out computing capacity and carries heavy debt, saw its bond yield rise to 15% in October.

Demand keeps growing

Cloud revenue at the large tech companies rose 50% in the second quarter. There are no clear signs that customers are abandoning the services, but investors want to see the enormous investments turn into profit. How long lenders are willing to wait may decide whether the AI boom continues.