Tech firms take fresh hit as earnings misses fan AI fears

Tech firms faced further setbacks on Friday after a series of disappointing earnings reports deepened concerns about the AI investment boom. Traders were also wary of the recent Bitcoin price drop following the largest crypto exchange reporting a significant hack. AI-linked companies experienced sharp losses, with Amazon and Intel reporting earnings that fell short of expectations due to weak demand and supply-chain issues.

Google unveiled its Gemini 4 Carbon AI model, focusing on cybersecurity and handling complex tasks. Alphabet's shares plummeted over 12 percent following a decline in revenue and an ad slowdown. Amazon's stock fell more than seven percent, while Intel dropped 23 percent. The Nasdaq ended the day down more than one percent. The poor earnings season has seen most AI firms suffer losses, amid fears of higher funding costs and credit risk affecting hyperscalers' build-out plans.

The selloff impacted broader markets in Asia, with South Korean chipmaker SK hynix and Samsung Electronics both declining over six percent. This downturn contrasts sharply with earlier optimism, like SK hynix's record 632 percent increase in operating profit and Anthropic's first-half revenue surge of nearly 1,300 percent in its IPO filing.

As investors focus on upcoming US midterm elections, concerns have arisen about potential changes in US foreign policy, particularly regarding tensions with Iran.