Nasdaq drops 2.8% as Intel and Amazon results fuel AI selloff

US stocks fell sharply on Friday, with the Nasdaq Composite posting its largest one-day percentage drop since June 5, as disappointing results from Intel and Amazon intensified concerns about returns on massive artificial intelligence investments. The tech-heavy index fell 2.86% to 25,437, while the S&P 500 lost 1.82% to 7,580.07 and the Dow Jones Industrial Average dropped 1.09% to 51,770.31. Intel shares plunged about 29% after issuing a weaker-than-expected fourth-quarter revenue forecast of $15-16 billion versus analyst estimates of $17.1 billion. Amazon also declined after reporting third-quarter results and revenue that missed Wall Street expectations, including negative free cash flow of $42.4 billion. Selling pressure spread across semiconductor stocks and major tech companies, with Advanced Micro Devices losing 11%, Nvidia falling 4%, and Broadcom dropping 5%. Investors are increasingly questioning whether companies can convert substantial capital expenditures into sustainable returns, with Alphabet experiencing its worst day ever on Thursday after missing earnings expectations. Defensive sectors gained as investors shifted away from technology, with consumer goods and healthcare stocks rising.