Nasdaq posts sharpest decline in months on AI capex worries
U.S. stocks declined, led by a sharp drop in the Nasdaq Composite, as investors fretted over high AI capital expenditures and rising interest rates. Micron Technology rallied on strong earnings, while SpaceX and Palantir faced significant sell-offs. The Dow Jones showed resilience compared to tech-heavy indexes.
*this image is generated using AI for illustrative purposes only.
U.S. stocks endured a volatile week as the Nasdaq Composite posted its sharpest weekly decline in months, weighed down by weakness in mega-cap technology stocks. The S&P 500 also finished lower, while the Dow Jones Industrial Average proved more resilient, supported by gains in industrials and financials. Investors reassessed the sustainability of the artificial intelligence boom amid mounting concerns over soaring capital expenditures by the industry’s biggest players, with expectations for higher interest rates persisting following recent Federal Reserve signals.
Corporate earnings painted a mixed picture for the technology sector. Microsoft came under pressure as investors questioned whether accelerating AI infrastructure spending would translate into sufficient long-term returns. In contrast, Micron Technology surged after delivering stronger-than-expected earnings and upbeat guidance, reinforcing confidence in demand for AI memory chips. Investors increasingly rotated toward value-oriented sectors while trimming exposure to high-growth technology names.
Market Movers
The following table highlights key stock performance during the period:
| Company: | Performance |
|---|---|
| Micron Technology | Surged on strong earnings and guidance |
| SpaceX | Dropped 16% in worst day since IPO |
| Microsoft | Fell on concerns over AI spending returns |
| Netflix | Fell to 20-month low |
| Palantir Technologies | Suffered steepest decline since 2021 |
Earnings and Analyst Insights
Micron Technology delivered a blockbuster fiscal third-quarter report, beating Wall Street expectations with $41.46 billion in revenue and adjusted earnings of $25.11 per share. CEO Sanjay Mehrotra highlighted that the company is investing at record levels to meet customers’ "rapidly growing" demand and noted new long-term strategic customer agreements designed to improve revenue visibility. Meanwhile, Take-Two Interactive Software Inc. was highlighted as having significant upside from the launch of Grand Theft Auto VI, with analysts expecting the title to generate roughly twice the lifetime monetization of its predecessor.
Intel Corp. faced skepticism from Wall Street after a sharp rally fueled by reports of a potential Apple Inc. foundry partnership, with analysts arguing the stock is "becoming a meme stock" as gains outpaced the likely financial impact. SpaceX shares plunged 16.4%, erasing approximately $400.8 billion in market value, though it remained valued at about $2.04 trillion. Palantir Technologies Inc. saw its steepest decline since 2021 amid a broad selloff in high-multiple AI and software stocks and intensifying bearish pressure from investor Michael Burry.
Will the rotation into value-oriented sectors persist if the Federal Reserve maintains higher interest rates for an extended period?
Can Micron's strong performance and strategic agreements stabilize the broader semiconductor sector amid AI spending skepticism?
How will Microsoft's future earnings be impacted if investors continue to demand immediate returns on massive AI infrastructure investments?
18
Access 50+ Readymade Screeners 
Use 200+ Custom Filters 
Get Full Market Insights 
