AI Eats $2 Trillion, Wall Street Sends a $100 Billion Receipt 🧾

Wall Street ended October with a selloff that erased roughly $2 trillion from the Nasdaq-100’s market value as investors questioned whether the artificial intelligence boom can justify its enormous costs, with Intel, Reddit and Alphabet among the hardest-hit names. Intel shares dropped nearly 30% to $65.15 on Friday morning, erasing more than $100 billion in market value after the chipmaker forecast fourth-quarter revenue roughly $1.57 billion below what Wall Street expected.

Intel reported that its data center and AI business grew 78%, its fastest pace in 15 years, while quarterly revenue rose 21% to $16.5 billion. The company forecast fourth-quarter revenue of $15 billion to $16 billion, versus analysts’ roughly $17 billion estimate, and expects revenue from its PC-focused division, which generated $8.1 billion in the latest quarter, to fall more than 20% from the third quarter to the fourth. CEO Lip-Bu Tan told investors on Thursday’s call that “rebuilding Intel is going to be a multiyear journey,” while CFO David Zinsner said, “We see the PC slowdown continuing at least through the first half of next year.”

The forecast followed a fatal explosion at Intel’s Kiryat Gat factory in Israel on October 14, which Intel estimated would add about $300 million to the fourth-quarter hit; the facility disruption is expected to have an estimated $600 million revenue impact over two quarters. Memory shortages linked to AI data-center demand were also cited as a factor in weaker PC sales. Intel’s five-year debt-default insurance cost reached a record 123.5 basis points on Friday, its largest one-day move since October 2022, according to Markit data. The company said the PC slump would end when memory supply normalizes.

Other technology companies also reported pressure from AI-related spending. Alphabet shares lost nearly 13% during the week after the company reported $9.1 billion in negative free cash flow as AI infrastructure spending accelerated and its core search advertising business missed expectations. Amazon’s AWS cloud revenue grew 39%, but the company reported negative free cash flow of $42.4 billion over the preceding 12 months and expects capital expenditure of approximately $220 billion this year, with more spending anticipated in 2027.

Reddit fell more than 36% over the week after warning that Google’s AI-generated search answers were reducing traffic to the platform. ServiceNow dropped approximately 34% for the week following disappointing earnings and a weaker backlog-growth outlook, while enterprise software and cybersecurity stocks also declined. Investors entered the selloff with elevated valuations and growing inflation concerns, alongside indications that the Fed will increase interest rates in December. Intel started 2026 at $39.38, according to Yahoo Finance data, so even at $67 the stock was up about 65% this year before the plunge.