US Tech Stocks Plunge $2 Trillion as AI Spending Drives Negative Cash Flow

In late October 2026, the Nasdaq‑100 lost roughly $2 trillion in market value as investors reacted to disappointing earnings from major technology firms and the high cost of their artificial‑intelligence initiatives. Alphabet’s shares fell 13 % after reporting $9.1 billion of negative free cash flow driven by accelerated AI infrastructure spending, while Amazon posted $42.4 billion of negative free cash flow despite a 39 % rise in AWS revenue and announced $220 billion in capital expenditures for the year. Intel’s share price dropped nearly 30 % following an explosion at its Israeli plant that disrupted production and a sharp decline in PC demand, compounded by a lower-than‑expected revenue forecast. Reddit and other software companies also saw steep declines as AI‑generated search answers and weaker backlog growth eroded their business models. Rising inflation and the prospect of a Fed rate hike added further pressure on already elevated valuations.