Intel shares fell 28% on Friday, while Alphabet's stock dropped another 1.4% after a 12% plunge on Thursday, as investors reacted to heavy spending on artificial intelligence. The Nasdaq ended October with its worst monthly slide since March 2025, according to the BBC report.

Meta, Alphabet, Oracle, Amazon and Microsoft have committed to spending $800bn between them in 2026, the report says. Alphabet expects to spend up to $205bn this year, almost entirely on AI-related investments.

Alphabet's market value fell by more than $500bn (£374bn) on Thursday after the company said the AI summaries it now shows as the top answer to search queries were affecting its core search advertising revenue.

Intel said it plans to increase AI spending even though demand for computers is weakening. Its finance chief, David Zinsner, said the firm did not expect to bring in more cash than it spent this year. He also forecast lower-than-expected revenue for the fourth quarter. "Looking ahead, we see the PC slowdown continuing at least through the first half of next year," he said in the company's third-quarter earnings report. Intel shed more than $130bn in value on Friday.

Amazon said on Thursday that its spending had outpaced its cash income, and that spending rose sixfold over three months. The company has committed $220bn this year to projects including AI data centres, network equipment and servers. Its shares were down 1.4% at the end of Friday trading.

Reddit stock fell 29% after the platform reported weaker-than-expected daily user figures. It also warned that Google's growing AI-driven search was hurting referral traffic. Roblox shares fell 18% after its daily active user numbers dropped.

Chris Low of FHN Financial told Reuters that the stock market's reaction centred on large players such as Amazon and Google, which he said were "showing some pretty significant growing pains as they aggressively pursue the AI build-out." Kathleen Brookes of XTB said investors "have turned ruthless, punishing any signs of disappointment in [third quarter] earnings."

Many analysts have debated whether AI stocks are in a bubble, the report notes. The concern is that some firms may not earn enough from AI to justify their high valuations. Despite the recent falls, the Nasdaq is up 7.8% over the past year, Amazon is up nearly 8%, and Alphabet is down 1.3%.