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Technology stocks had been priced for perfection.<\/p>\n
Yet a series of less-than-stellar earnings results from some of the world\u2019s most important tech companies is causing fears to intensify around a possible slowdown in the aggressive pace of the artificial-intelligence build-out. That, in turn, threatens a key pillar of the market\u2019s success over the past four years.<\/p>\n
The Nasdaq Composite<\/p>\n
INTC. -28.58%<\/p>\n<\/div>\n
shed 29% of their value to seal their worst single-day performance since at least 1980. On Thursday, Alphabet\u2019s stock GOOG<\/a> GOOGL<\/a> recorded its steepest daily drop on record<\/a><\/span>.<\/p>\n \u201cAll earnings season, it has been clear we were too far out in front of our skis, and even most beats-and-raises in the tech sector found themselves lower,\u201d said Ken Mahoney, the CEO of Mahoney Asset Management. \u201cIf you miss like Intel did, forget it.\u201d<\/p>\n In the past week, various negative factors converged to make investors even more nervous about a tech sector so highly tied to unyielding artificial-intelligence spending. Investors are now grappling with the prospect that the period of peak earnings growth has passed.<\/p>\n Charlie McElligott, a strategist at Nomura, pointed out that earnings reports from a number of tech firms exposed incipient weakness in their core businesses. That has prompted investors to question whether companies will be able to maintain the aggressive pace of spending on chips and data centers needed to power AI technology.<\/p>\n Alphabet missed quarterly revenue expectations for the first time since 2024, and Amazon.com came up short as well.<\/p>\n AMZN\u00a0 -1.41%<\/p>\n<\/div>\n At Alphabet, Wall Street looked past triple-digit cloud growth and focused on issues potentially indicative of future business challenges. The company posted a pronounced miss on search revenue, which fueled fears about whether AI will indeed eat away at the search dominance that the company has commanded for decades.<\/p>\n The search woes could also be spreading, with Reddit shares<\/p>\n RDDT. -29.22%<\/p>\n<\/div>\n seeing their worst day on record Friday after management warned that declining referral traffic from Google search was actively squeezing audience growth.<\/p>\n And now there are renewed questions about whether the fervent investments in artificial intelligence are leaving little room to spend on anything else. Intel\u2019s weak forecast reflected how memory-chip prices are hurting demand for laptops, all while information-technology teams have to balance spending on AI tools against hardware purchases.<\/p>\n Even with companies that aren\u2019t in the semiconductor business, the results strike at the core of the chip trade because of the sheer amount of money that hyperscalers like Alphabet, Amazon, Microsoft and Meta have been funneling into AI infrastructure.<\/p>\n MSFT. -1.55%<\/p>\n<\/div>\n Shares of chip companies and a handful of industrial firms that saw orders soar because of the AI build-out fared extremely well during the first half of 2026.<\/p>\n But the trend in the back half of the year has, so far, been much more downbeat. While Wall Street analysts have generally continued to raise their corporate earnings estimates for next year, investors have been increasingly unwilling to buy stocks at premium valuations. As a result, the price of shares of companies like Nvidia relative to expected earnings has started to diminish.<\/p>\n\n\n\n