Nasdaq drops 2.8% as Intel and Amazon reports deepen AI stock selloff

US stocks fell sharply on Friday, with the Nasdaq Composite posting its largest daily percentage drop since June 5, as disappointing reports from Intel and Amazon deepened concerns over returns on massive artificial intelligence investments. The tech-heavy index fell 2.86% to 25,437, while the S&P 500 declined 1.82% and the Dow Jones Industrial Average dropped 1.09%. Intel shares plunged about 29% after the chipmaker issued a weaker-than-expected fourth-quarter revenue forecast of $15 billion to $16 billion, below analyst expectations of $17.1 billion. Amazon also came under pressure despite beating third-quarter earnings estimates, reporting negative free cash flow of $42.4 billion and maintaining its 2026 capital expenditure guidance at $220 billion. The selloff spread across semiconductor stocks, with AMD falling 11%, Nvidia dropping 4%, and Broadcom declining 5%. All three major indexes ended the week lower, with the S&P 500 and Nasdaq posting October losses while the Dow finished the month higher. Investors increasingly question whether tech companies can convert heavy capital spending into sustainable returns, with Alphabet experiencing its worst day ever on Thursday. Defensive sectors like consumer staples and healthcare advanced, while energy companies Exxon Mobil and Chevron beat quarterly profit expectations.