AI Costs Sink Tech Stocks, Intel Plunges

U.S. stock index futures saw a sharp decline on Friday, with the Nasdaq 100 futures dropping 2.16%. This downturn was largely driven by investor concerns regarding the escalating costs associated with artificial intelligence infrastructure. Both Amazon's plans for substantial AI investments and Intel's warning of expected cash burn this year amplified these worries.

Intel's shares plunged 25% in premarket trading following its announcement of expected cash burn due to manufacturing bottlenecks and heavy investment. The company also anticipates persistent weakness in the personal computer market through the first half of 2027. Simultaneously, Amazon's shares fell 6.5% after forecasting holiday-quarter sales below expectations, compounded by ongoing AI infrastructure investments.

Cryptocurrency-linked stocks tumbled significantly after reports of a $6.36 billion theft from Binance, the largest on record. This massive breach, reportedly originating from a compromised engineer's laptop, saw funds moved across 10 blockchains. Consequently, major crypto stocks like Strategy, Coinbase, and Hut 8 experienced notable losses.

Other notable market movements included Reddit shares, which dropped around 23% despite exceeding third-quarter expectations, due to a weaker revenue outlook. Twilio shares tumbled 17.5% following a projected slowdown in organic revenue growth. Roblox also fell 19.1% as it reported a decline in daily active users and a weaker bookings forecast.

In contrast, Mondelez International shares climbed 6.1% on better-than-expected earnings and improving volume trends. Rivian Automotive surged 7.2% after reporting third-quarter results that surpassed expectations and raising its full-year delivery forecast.