US tech shares tumble as AI cost worries hit Nasdaq

AI cost concerns drive tech sell‑off

Intel shares have continued to slide, contributing to a broader sell‑off in U.S. technology stocks. The Nasdaq Composite opened at its lowest level in more than two months, signaling a sharp decline across the tech‑heavy index.

Investors cite rising costs associated with artificial‑intelligence development as a key driver of the downturn. Firms that are investing heavily in AI infrastructure face higher capital expenditures, which can compress profit margins and raise valuation concerns. The surge in AI spending has prompted analysts to reassess growth expectations, as higher costs may offset the revenue upside from AI‑driven products.

With the Nasdaq’s weak opening, other technology names such as Nvidia, Advanced Micro Devices and cloud‑service providers are likely to see similar pressure. The sector’s heavy weighting means that declines in a few large caps can pull the index lower.

Market participants will watch forthcoming earnings releases for guidance on cost control and AI‑related revenue growth. Any indication that firms can curb spending or generate higher returns from AI initiatives could temper the current sell‑off. Additionally, investors may look for signs that companies can translate AI investments into sustainable earnings growth.

Beyond equities, the decline may influence related asset classes, including semiconductor ETFs and cloud‑infrastructure funds, as investors reassess the risk‑reward profile of technology‑heavy portfolios.

Based on reporting from BBC Business. Read the original.