AI trade falters after disappointing tech earnings - Semafor

Some investors are dialing back their expectations for US economic growth, as warning signs flashed red over the sustainability of the country’s breakneck AI buildout.

The tech-heavy Nasdaq slid into correction territory on Friday as investors unwound their AI bets.

Intel stock plunged 29%, the chipmaker’s biggest single-day selloff since the 1970s; concerns mounted over hyperscaler spending after disappointing Amazon and Google earnings; and S&P Global revised Meta’s outlook to “negative,” citing its high capex.

Earnings misses are generating “sober questions” about the AI investments powering the economy, a strategist told Bloomberg.

“You can’t find the growth slowdown in any of the economic data,” a portfolio manager told the Financial Times. “But… a reassessment of AI means a reassessment of growth expectations.”