Wall Street tech sell-off raises doubts over AI boom returns

Wall Street's technology-led rally faces a reality check as a sharp sell-off in tech stocks raises questions over whether the artificial intelligence boom has run too far, with disappointing earnings and aggressive AI spending triggering the worst decline in US stocks since June. The Nasdaq 100 plunged 3.5% on Friday, briefly crossing the threshold for a technical correction, while the S&P 500 fell 1.8%. Intel slumped 29%, its steepest fall in over four decades, and other chipmakers including Nvidia and Broadcom also declined. Amazon and Alphabet dropped after sticking with aggressive AI investment plans despite slowing core businesses. S&P Global Ratings lowered its outlook on Meta's credit rating to negative, citing rising AI infrastructure spending and concerns over returns. The core businesses of major US tech companies, which underpin an estimated $750 billion in AI spending this year, are showing signs of slowing, prompting investors to demand clearer evidence that massive investments will generate sustainable earnings.