Tech Stocks Plunge as AI Spending Strains Cash Flows

Major technology companies experienced significant stock declines on Thursday and in after-hours trading as the high costs of artificial intelligence infrastructure spending strained cash flows. Intel Corporation saw its shares drop 18% after flagging "near term headwinds across the PC industry" and reporting a factory explosion in Israel. The explosion caused a two-week shutdown estimated to cost the company $600 million in lost revenue over two quarters.

Other tech giants reported similar financial pressures. Alphabet Inc. and Meta Platforms Incorporated both reported burning cash in the September quarter, while Amazon.com forecast holiday-quarter sales that fell below Wall Street expectations. To fund its ongoing operations and AI spending, Microsoft issued a $25 billion debt sale.

These results triggered a broader sell-off in the semiconductor index, impacting PC makers such as HP and Dell. Investors expressed growing concern that surging data-center spending is turning tech giants into major borrowers, while inflation and chip shortages continue to squeeze consumer demand for hardware.