MarketsOCT 31, 2026

Nasdaq falls 2.9% as AI spending scrutiny sharpens

The selloff raises a vendor-resilience question for small businesses, not evidence of weaker customer demand.

BY HENLEY MARRAST · MARKETS DESK

Technology stocks deepened their selloff Friday, October 30, as investors questioned whether heavy artificial-intelligence investment would produce sufficient returns. For small-business owners relying on AI and cloud services, the relevant question isn’t the stock price itself. It’s whether spending pressure could eventually reshape the services behind their customer-facing workflows.

According to Associated Press, the Nasdaq Composite fell 2.9%, while the S&P 500 lost 1.8% in its worst session since June. The Nasdaq lost 747.73 points, closing at 25,437.00; the Dow Jones Industrial Average fell 1.1%.

“Figures: Associated Press’s Friday index report.”

Amazon supplied a concrete picture of the spending burden. AP reported $94.8 billion in property and equipment spending, primarily on AI, and a $42.4 billion free-cash-flow outflow over the preceding 12 months. Its shares fell 1.4% after summer-quarter profit missed expectations. Intel dropped 28.6% following a weaker-than-expected profit forecast, according to Kiplinger. Those results put expenditure and earnings expectations in the same frame, without establishing that every provider faces the same business conditions.

The operating signals were mixed. Kiplinger reported that Microsoft’s Azure sales exceeded expectations and that Alphabet recorded its weakest advertising-revenue growth in five quarters. Axios described a related tension at Google: AI-related pressure on search-ad margins alongside growth opportunities in Google Cloud. The analytical distinction matters: demand for cloud services and confidence in the returns on infrastructure spending aren’t interchangeable.

Funding scrutiny extended beyond listed companies. Investing.com, citing The Wall Street Journal, reported that OpenAI had secured approximately $11 billion in commitments against an initial $30 billion funding target, attributing the gap to investor concerns about AI spending.

For owners and founders of small teams, the practical inference is a vendor-resilience review, not an emergency migration. The selloff doesn’t demonstrate higher customer-acquisition costs, weaker customer demand or deteriorating service. Before committing customer acquisition or service workflows to a provider, owners should assess how dependent those workflows would become and identify contingency options if service, pricing or product priorities change. That precaution applies to business-facing and consumer-facing firms alike.

The structural issue is the distance between a provider’s investment commitments and a customer’s need for continuity. A falling share price doesn’t establish that a tool is unreliable; the owner’s task is to avoid making reliability depend on assumptions about someone else’s financing.

Sources

About the author

Henley Marrast

MARKETS DESK

Henley Marrast covers AI-equity flow, accelerator demand, and earnings prints for AI Sheet Report. She leads coverage of the public AI complex from the New York markets desk, with a focus on the daily tape and quarterly results. She has been writing about technology markets for several years.