Tech Stocks Slide as AI Capital Expenditure Raises Cash Flow Concerns

Technology shares fell sharply this week as investors questioned whether the hefty costs of building AI infrastructure would soon generate higher profits. Earnings reports from major tech firms showed growth in cloud and AI businesses, but the spending on data centres, chips and networking equipment raised concerns about cash flow sustainability. Alphabet’s shares dropped 13% after reporting two consecutive quarters of negative free cash flow and spending over $50 billion on infrastructure, a first for the company. Amazon and Meta also saw declines, with Amazon’s negative free cash flow exceeding expectations and Meta’s capital expenditure plans rising sharply. Intel’s profit forecast fell short of analyst expectations, leading to a nearly 29% drop in its stock price. The sell‑off weighed on U.S. indices, with the S&P 500, Dow Jones and Nasdaq Composite all falling for the week, while China’s STAR 50 Index also declined sharply.