Chip and platform stocks led a sharp sell-off on Thursday as investors argued over a single question: how much money the largest technology companies can keep pouring into artificial intelligence before returns have to show up.
The Nasdaq Composite fell 2.6 percent, its steepest drop since a 4.2 percent slide on 5 June. The S&P 500 lost 1.21 percent. Six of the seven largest US technology companies closed lower, with Apple the only gainer, up 1.2 percent.
Guidance, not demand, started it
Meta fell nearly 7 percent after raising projected capital spending for the year to $135bn to $145bn even as net profit missed expectations. Amazon fell 4.6 percent, Nvidia 4.4 percent, Tesla and Alphabet 3.1 percent each, and Microsoft 2.2 percent.
The damage was heavier further down the supply chain, where revenue depends on orders for servers and accelerators. Intel and Advanced Micro Devices each dropped about 8 percent. Broadcom lost 4.3 percent, a day after its chief executive warned about what he called a casino mentality in AI investing.
Oil added a second problem
Brent crude rose 4 percent on Thursday and kept climbing on Friday, moving above $114.20 a barrel, its highest level since May. Prices have risen since February on the fallout from the US-Israel war on Iran. Higher energy costs raise the cost of running data centres and squeeze the households that buy the services.
Asia followed Wall Street lower. Japan's Nikkei 225 fell more than 2 percent in morning trade before recovering part of the loss, South Korea's KOSPI dropped as much as 3.5 percent, and Hong Kong's Hang Seng slipped about 0.5 percent.
What the two sides agree on
Almost nobody disputes the scale of the spending. Gartner forecasts global AI investment of $2.7 trillion in 2026 and $3.6 trillion in 2027. The argument is whether that money buys durable revenue or a capacity glut.
"Nothing has changed. Investors have just decided to be afraid this week," said Jay Goldberg of Seaport Research Partners, who argued the move was driven more by sentiment than fundamentals. Others point to depreciation, power contracts and debt funding as reasons the bill arrives before the profits do.
For chip makers, the practical test is order visibility into 2027. Until that is answered, every earnings release becomes a referendum on the build-out itself.
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