NEW YORK, Oct 29 — Wall Street's worries about the cost of the artificial intelligence (AI)boom escalated after the market close on Thursday, as results from Amazon and Intel showed the infrastructure race is not only straining the tech industry but affecting consumers.
Surging data centres, as highlighted in Amazon's massive cash burn, have turned once debt-light tech giants into major borrowers, while price hikes are squeezing global demand for devices like smartphones and personal computers (PC).
Amazon forecast holiday-quarter sales below Wall Street expectations, a potential sign of growing pressure on consumers as inflation picks up; Intel's PC business also took a hit as a memory chip shortage drove up costs.
The AI spending spree is also eating into Big Tech's once-enviable cash flows. Alphabet and Meta both burned cash in the September quarter, while Microsoft, the only exception, joined their borrowing binge with a US$25 billion (RM101.1 billion) debt sale on Thursday.
The tech giants have deep pockets to sustain their spending, but investors have grown increasingly wary of smaller AI cloud firms borrowing heavily to deliver on enormous order backlogs.
Amazon's seven per cent after-hours slide was accompanied by losses of 5.8 per cent to 6.7 per cent in AI cloud stocks CoreWeave, Nebius, and Iren. Alphabet, which closed regular trading down nearly 13 per cent, fell another 1.5 per cent after-hours.
The semiconductor index also sold off post-close after Intel blamed "near-term headwinds across the PC industry." The index had already dropped 1.4 per cent during the regular session due to Alphabet's messy earnings report.
Shares of PC makers HP and Dell sank eight per cent and 6.8 per cent.
"The revenues missed due to lower PC demand, and forward guidance also disappointed. As Google learned today, earnings matter," said Bokeh Capital Partners LLC's founder and chief investment officer Kim Caughey Forrest. Google’s parent Alphabet dropped 13 per cent on Thursday.
Intel factory shutdown
Intel, whose shares were down 18 per cent, also said a factory explosion in Israel caused a two-week shutdown and would cost it roughly US$600 million (RM2.42 million) in lost revenue over two quarters.
"Overall semiconductor weakness after hours is primarily a function of Intel guide and negative sentiment spillover," said Rosenblatt Securities equity sales trader Michael James.
Some analysts said Intel's problems in the PC sector, an area of technology that does not garner the same scrutiny on Wall Street as the AI buildout, do not seem to necessarily mean big problems for other chipmakers that operate more prominently in AI.
Nevertheless, investors in the less-active post-market trade chose to shoot first and ask questions later. AMD dropped four per cent and Broadcom fell two per cent. Among the biggest losers in the volatile session was the Direxion Daily Semiconductor Bull ETF, which offers investors three times the daily performance of the SOX and was off nine per cent.
The SOX has been one of 2026's standout performers, rising more than 60 per cent as shortages of chips and equipment needed for the AI buildout drive up prices and profits at firms ranging from giant Nvidia and memory chip firm Micron to Marvell Technology.
But that momentum has been tested over the past month by tightening financing terms. That has kept some expected initial public offerings on the sidelines and put some highly leveraged AI infrastructure firms under pressure.
The SOX has declined 13 per cent since hitting its recent high in October and is off 21 per cent from its all-time high in June.
"I think Intel was seen as this unicorn within the tech sector because it was seen as being weaker compared to Nvidia and AMD.
"It just had this miraculous rise, and you got a lot of retail money into it, and some of that money is easy come, easy go," said Longbow Asset Management's chief executive officer Jake Dollarhide, whose organisation is based in Tulsa, Oklahoma, the United States.
