Tech market bloodbath: Intel crashes 30pc, Amazon misses earnings

Technology stocks suffered a significant decline on Friday as disappointing earnings reports from major US companies intensified concerns over the AI investment boom. Bitcoin also experienced a sharp drop following a major hacking incident at Binance, the world's largest cryptocurrency exchange.

Kathleen Brooks, research director at XTB trading group, stated that "the end of the week is dominated by a continuation of the recent AI sell-off on disappointing earnings, and concerns about the safety of crypto."

AI-linked tech firms were hit hard by the earnings reports from Amazon and Intel, fueling fears about the massive amounts of money being poured into artificial intelligence. Amazon's shares dropped 5.5 percent at the start of trading in New York after missing analyst expectations for profits and revenue, although they recovered during the morning session.

Intel plummeted by 30 percent after acknowledging that the AI boom was negatively impacting its main market for personal computers by driving up the price of memory chips. Shares of AI semiconductor companies such as Nvidia, Micron, and AMD also fell, with Nvidia dropping 4.6 percent, Micron down 5.9 percent, and AMD tumbling 11.7 percent.

Alphabet's parent company Google experienced further losses, falling by an additional 1.8 percent after heavy selling on Thursday that wiped billions of euros off its value. The tech-heavy Nasdaq Composite index fell 2.7 percent in midday trading.

Brooks added that "it is unlikely that the AI trade will recover on Friday, and instead the focus is shifting to the non-tech sectors of the market and safe havens." While London's tech-light FTSE 100 index edged higher due to strong earnings from companies like AstraZeneca and BP, shares in British bank NatWest fell 8.8 percent after its third-quarter net profit declined, underperforming rival banks.

The sharp losses for tech firms reversed optimism earlier in the week, which was prompted by AI giant Anthropic's IPO filing. Market analyst Chris Beauchamp of IG noted that "given the importance of tech stocks to global markets, it is not surprising to see stock markets around the world ending the week with heavy losses."

South Korea's tech-heavy Kospi index closed the week down 3.5 percent, and Tokyo ended with a 2.0-percent loss. Hong Kong, however, saw a 1.5-percent increase in its index. Focus is also turning to the upcoming US midterm elections on Tuesday and their potential impact on the final two years of Donald Trump's presidency.

Oil prices climbed around two percent on Friday due to renewed supply concerns after Iran announced that four tankers had been hit by mines in the Strait of Hormuz. ExxonMobil shares rose 1.9 percent after reporting that its third-quarter profits had more than doubled to US$15.4 billion, benefiting from higher oil prices and refining margins due to the US-Iran war.