Chip stocks fall as investors question AI spending, and Intel drops about 28% on a weak outlook

Investor worries about AI infrastructure spending spread through the market on Friday. The Nasdaq fell 2.9%, Nvidia dropped 4%, Broadcom fell more than 5% and Qualcomm fell 11%, TechCrunch reports. Over the past two weeks, Alphabet, Amazon, Meta and Microsoft have outlined more than $740 billion in capital spending for this year. Alphabet fell 12% on Thursday, its worst day on record, wiping out $500 billion in market value. It had reported negative free cash flow of $9.1 billion for the third quarter, its second straight quarter in the red, while quarterly capex rose to $51.4 billion. Intel fell about 28%, one of its worst days ever. It forecast fourth-quarter revenue of $15 billion to $16 billion, against analyst expectations of about $17 billion, said its gross margin would fall to 37% from 43%, and said it expected no positive cash flow. CNBC reports that the drop cut the value of the US government's 10% stake by $12 billion. Intel CEO Lip-Bu Tan said customers had signaled a PC slowdown because of memory prices and availability. That pressure comes from the AI industry's demand for components.