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Intel, Reddit slump as AI spending doubts hit October’s final session

Intel and Reddit each lost about 29% as investors questioned the scale and financing of AI-related spending, helping drive the Nasdaq 100 toward correction territory.

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Oct 31, 2026 - 09:25

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An Intel campus building (file photo). Photo courtesy of Intel Corporation, via Axios.

Intel, Reddit slump as AI spending doubts hit October’s final session

U.S. technology shares ended October under heavy pressure, with Intel and Reddit each falling about 29% as investors reassessed the durability, financing and payoffs of the artificial-intelligence investment boom.

Intel and Reddit lead the selloff

Intel dropped 29% on Friday, while Reddit also fell 29%, according to Reuters. Sandisk, another chipmaker that has benefited from AI-related capital spending, lost 13%. The Nasdaq composite recorded its biggest one-day decline since June. The Nasdaq 100 fell 3.5% and was close to the commonly used 10% correction threshold from its recent high.

Reddit’s decline followed its latest earnings report and a weaker-than-expected fourth-quarter sales outlook. CNBC reported that the company projected sales of $1 billion to $1.03 billion, below analysts’ $1.05 billion estimate. Reddit also said it would test requiring users to log in to view content, after chief executive Steve Huffman said traffic referrals from Google had fallen meaningfully as AI-generated search overviews expanded.

Intel’s outlook adds to investor caution

Intel’s third-quarter results were stronger in several headline measures: company-reported revenue was $16.5 billion, up 21% from a year earlier, while non-GAAP earnings per share were $0.52. But Intel’s own release forecast fourth-quarter revenue of $15 billion to $16 billion and non-GAAP EPS of $0.25. The company also said it expects the PC slowdown to continue at least through the first half of next year.

Reuters reported that the four major cloud companies—Microsoft, Meta, Amazon and Alphabet—have accounted for more than one-third of capital spending by current S&P 500 constituents over the past year, citing Capital Economics. John Higgins of Capital Economics said investors were becoming more nervous as the hyperscalers’ spending boom became partly dependent on external financing.

Risk reduction spreads beyond technology

The retreat was broader than the AI-linked technology names. Reuters reported that financial stocks also fell, with Goldman Sachs down 4% and Jefferies off 6%, while Treasuries rallied. Silver dropped 6% and gold fell 3.5%. Oil rose 2%, adding to concerns about an economy that some investors view as increasingly dependent on AI investment for momentum.

Market participants differed on the severity of the move. Brian Jacobsen of Annex Wealth Management described investors as deciding together which companies would monetize the spending, while Wedbush’s Sahak Manuelian characterized the selling as a sharp reversal after a very large run-up rather than evidence of a broad leverage crisis.