Wall Street Shock: Tech Giants Face AI Capex Setback

Wall Street experienced a significant downturn, driven by tech giants like Microsoft and Amazon as Alphabet announced major AI investments. The news sparked investor caution over heavy AI spending, causing major indices such as the Nasdaq and S&P 500 to decline, with significant impacts on tech and software stocks.

Wall Street took a nosedive on Thursday, led by heavy losses in major tech stocks including Microsoft and Amazon, following Alphabet's announcement of potentially doubling its AI-related capital expenditure.

The Google parent's stock dropped amid plans to invest as much as $185 billion in capex by 2026, with tech giants collectively expected to spend over $500 billion on AI this year.

Investor apprehension over such investments intensified as Microsoft's valuation slipped, alongside declines for Oracle, Palantir, and Nvidia. Concerns persist over whether these hefty expenditures will translate into revenue gains, as software stocks experience consecutive weeks of losses.

(With inputs from agencies.)