AI pressures mount as Amazon and Intel shares tumble

Investor concerns over the rising costs of artificial intelligence (AI) intensified on Friday following disappointing earnings reports from Amazon and Intel, raising questions about the profitability of massive investments driving the AI boom. Shares of Amazon plummeted more than 12 percent after disclosing a cash burn of over $42 billion over 12 months through September, nearly double its previous record in 2022.

Intel suffered a decline of more than 25 percent, marking its worst day in over five decades, following a weak fourth-quarter forecast and a warning of a slowdown in the PC market. The tech-focused Nasdaq Composite fell 2.18 percent during early trading on Wall Street, while the S&P 500 dropped 1.15 percent. The Dow Jones Industrial Average declined by 205.84 points, or 0.39 percent.

Vijay Valecha, chief investment officer at Century Financial, noted in a report that the broader technology sell-off is a reflection of growing scrutiny over hyperscalers' spending plans and the mounting debt burden of AI infrastructure providers.