Tech Sell-Off Deepens as AI Giants Miss Estimates and Binance Hack Spooks Crypto

Key points

• Alphabet shares fell over 12% Thursday, its worst day in 20 years, after missing growth expectations and signaling higher AI spending.
• Amazon dropped nearly 7% in premarket trading after missing Q3 estimates and issuing a cautious Q4 forecast for the holiday season.
• Intel slumped over 25% before the open due to weak PC demand and a softer-than-expected Q4 outlook.
• Bitcoin fell to $77,695 after Binance reported a $6.3 billion hack, temporarily suspending withdrawals and deposits.
• Brent crude rose 2.5% to $113.51, nearing its March high, after a tanker was attacked in the Strait of Hormuz.

Background

This sell-off follows a volatile period for AI stocks, including Amazon's recent $7 billion bid for AI startup Decart. Markets had seen brief optimism earlier this week when SK hynix reported soaring profits and Anthropic revealed a revenue surge, but those gains were quickly erased by broader concerns over AI bubble risks and inflation.

How outlets are covering it

AP News emphasized the immediate impact on US futures, noting the S&P 500 dropped 1% and the Nasdaq fell 2.3%. Euronews highlighted the global ripple effect, with Asian chipmakers like Samsung and SK hynix falling sharply, and noted that analysts fear higher funding costs could force hyperscalers to slow AI build-outs. Yahoo Finance focused on the structural concerns, pointing out that Amazon's cash flow turned negative and that Intel's PC business faces mounting headwinds from component costs. All three sources agreed that the core issue is not a slowdown in AI demand, but rather the uncertainty surrounding the massive capital expenditure required to sustain it.

Why it matters

The simultaneous weakness in major tech firms and a major crypto exchange signals a broad risk-off sentiment in high-growth sectors. Rising oil prices due to geopolitical tensions in the Middle East add inflationary pressure, complicating the outlook for interest rates and corporate borrowing costs ahead of the US midterm elections.

What to watch

Investors will watch Tuesday's US midterm elections for potential shifts in US-Iran policy, which could further impact oil prices. Markets will also await further earnings from Asian chipmakers and monitor if the Binance hack leads to broader regulatory actions or further crypto market instability.