US technology shares suffered their worst selloff in months last week as a wave of quarterly results disappointed investors worried about whether massive artificial intelligence spending will ever pay off.

Alphabet led the rout. The Google parent reported third-quarter revenue of about $127.6 billion, slightly below the expected $128.2 billion, while earnings per share came in at $2.12 — well short of the $3.02 analysts had forecast. Net income fell about 25% year on year, and free cash flow swung to negative $9.07 billion. The stock tumbled nearly 13% on October 29, its steepest drop in years, dragging Nasdaq futures lower even as Microsoft's strong cloud results briefly lifted sentiment.

The pain spread to the chip sector on October 30, when Intel plunged 29% — its biggest single-day decline since the 1970s — after issuing fourth-quarter revenue guidance of $15 billion to $16 billion, below the $17.1 billion consensus.  The company cited approximately $300 million in lost revenue due to a production halt at its plant in Israel, along with weak PC demand. Qualcomm, AMD, Marvell and Arm all sank by around 10%, Nvidia fell 4.22%, and the Philadelphia Semiconductor Index dropped 7.2% in a single day. Nvidia has now shed more than $800 billion in market value this month from its October 6 peak valuation of $5.77 trillion.

Analysts said the selling reflects mounting doubts about AI profitability. Meta had already sparked a rout on October 22, when a surge in capital expenditure guidance — to between $135 billion and $145 billion for 2026 — sent its shares down 7% and pushed its free cash flow into negative territory, even as the company beat revenue estimates. JPMorgan strategists noted that this correction differs from July’s quick rebound, with reduced share buybacks and limited short covering providing less support.

The earnings turbulence came amid a busy period for markets. The US Federal Reserve held interest rates at 3.75%–4.00% on October 29, while AI lab Anthropic filed for its much-anticipated initial public offering on October 26. Investors are now turning to Apple's and Amazon's results for the next test of the AI trade.