Wall Street slid as Alphabet’s massive AI spending plan and Qualcomm’s weak outlook shook investor confidence, dragging tech and software stocks lower while traders awaited Amazon earnings and Nvidia results.
WEBDESK – Act Global Media
U.S. stocks slipped Thursday as investors reassessed the booming artificial intelligence trade after Google parent Alphabet unveiled aggressive spending plans and Qualcomm issued a weak outlook, triggering a sell-off in technology and software shares.
The S&P 500 hovered near a two-week low while the Nasdaq Composite fell to its weakest level in more than two months. The Dow Jones Industrial Average also declined, reflecting broad caution across equities.
Alphabet dropped about 2.6% after announcing it would double capital expenditure this year to strengthen its AI position. The move intensified concerns on Wall Street about whether massive investments in artificial intelligence will generate sufficient returns.
Other mega-cap stocks followed lower. Microsoft and Tesla each fell around 2%, while Amazon slipped roughly 3.5% ahead of earnings due after market close. Nvidia — the last of the “Magnificent Seven” set to report — is scheduled to release results on February 25.
AI enthusiasm cools
Investors have begun rotating out of last year’s high-flying AI winners as the scale of spending becomes clearer. Analysts warn the technology may help some sectors but hurt others — especially traditional software providers facing automation pressure.
Software and data firms such as ServiceNow and Salesforce extended declines, continuing a sharp sell-off earlier in the week. The S&P 500 software and services index has now fallen for seven straight sessions, wiping out roughly $830 billion in market value since late January.
Qualcomm shares plunged more than 8% after forecasting second-quarter revenue and profit below expectations, reinforcing fears that AI demand may not immediately translate into earnings growth.
Market shifts and commodities
As traders cut exposure to expensive tech stocks, money moved toward smaller companies. Mid-cap and small-cap indexes edged higher despite the broader market weakness.
Risk-off sentiment also hit alternative assets. Silver plunged nearly 13%, gold retreated, and bitcoin slipped below $70,000.
Earnings movers
Corporate earnings produced sharp stock swings:
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Estee Lauder fell 17.5% after forecasting annual results below estimates
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Snap rose 5.6% after topping quarterly revenue expectations
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Tapestry gained 8% on improved profit outlook
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Hershey climbed 8.8% after strong guidance
Analysts say markets are entering a phase where enthusiasm over AI innovation is being replaced by scrutiny over costs and profitability — a shift that could keep volatility elevated in coming weeks.
