A bruising week for technology stocks reached a crescendo on Friday as Intel (INTC) plummeted 30% and the Nasdaq Composite tumbled 2.7%, dragging the broader US market sharply lower.
Alphabet’s 12% collapse on Thursday had already rattled nerves, and fresh earnings from Amazon (AMZN) and Intel (INTC) compounded the damage, leaving investors questioning whether the artificial intelligence spending boom can sustain its own momentum.
SPI Asset Management analyst Stephen Innes captured the contradiction at the heart of the selloff, warning: “The boom is beginning to eat its own tail. AI spending creates demand. Demand creates scarcity. Scarcity creates pricing power. Pricing power pushes the cost of the buildout even higher.”
He added: “Then Wall Street turns around and asks the hyperscalers why the buildout has become so expensive,” a question now being directed at major cloud providers including Microsoft, Amazon Web Services, and Oracle.
The Dow Jones Industrial Average fell 0.8% and the S&P 500 lost 1.6%, reflecting how broadly the anxiety spread well beyond pure technology names by Friday afternoon.
AJ Bell analyst Dan Coatsworth described the mood shift as an “AI reality check”, arguing that the years of outsized rewards enjoyed by tech investors are giving way to something far more uncomfortable.
“That enthusiasm is now evaporating, and some investors are racing for the exit,” Mr Coatsworth said, adding that current price action in stocks such as Alphabet and Intel implied that “tech investors want to jump off the treadmill rather than slow it down.”
London’s equity markets held up considerably better, with the FTSE 100 (^FTSE) managing a slender gain of 7.71 points, or 0.1%, to close at 10,729.78, even as the mid-cap FTSE 250 slipped 0.9% to 24,453.36.
The contagion was nonetheless visible in London’s tech-adjacent stocks, with investment trust Polar Capital Technology shedding 6.0% alongside Computacenter (CCC.L), a Nvidia partner and AI sentiment bellwether, which fell by the same margin.
Frankfurt bore the brunt of European weakness, with the DAX 40 dropping 0.9% as data centre-exposed names including Siemens Energy, Infineon Technologies, and Hochtief weighed heavily on the index.
NatWest (NWG.L) provided the sharpest domestic drama, tumbling 8.8% to become the worst performer on the FTSE 100 after guidance on net interest margin unsettled investors following its third-quarter update.
Chief financial officer Katie Murray told analysts that “margin continues to be broadly stable through 2027,” language the market read as a ceiling rather than a floor on the lender’s earnings trajectory.
The Edinburgh-based bank’s underlying numbers were more reassuring, with operating pretax profit rising 1.9% to £2.23 billion in the three months to September 30, edging above the £2.20 billion consensus forecast.
AstraZeneca (AZN.L) stood out as the session’s most emphatic winner, climbing 7.0% after reporting a 22% surge in pretax profit to $3.96 billion and a 6.7% rise in revenue to $16.21 billion, while maintaining its full-year growth guidance.
Transport operator Mobico (MCG.L) also defied the gloomy tone, surging 12% after its board backed a £308 million cash offer from Leita Mobility, a subsidiary of Spain’s Autobuses de Leon, at 46 pence per share.
The bid represents a 55% premium to Mobico’s closing price of 29.7 pence on October 20, the last session before the formal offer period commenced, and implies a total enterprise value of £2.32 billion including debt.
Cryptocurrency markets added another layer of volatility to the day, with Coinbase (COIN) falling 12% in New York after Binance disclosed it was working to contain a “complex attack” that affected around $6.3 billion in funds, with investigations having “uncovered additional points of breach.”
Sterling drew some comfort from the turbulence, rising to 1.3396 dollars and briefly crossing the 1.20 euros threshold against the single currency for the first time since April 2025.
Brent crude climbed to $117.61 per barrel, its highest level since April, while gold weakened to $3,898.22 an ounce, its lowest print in more than a year, as investors rotated away from the traditional haven.
Looking ahead, the Bank of England faces a rate decision on Thursday, with markets expecting a hike that would set it apart from both the US Federal Reserve and the European Central Bank, which have both opted to hold rates steady.