Nvidia Shares Fall 4.7% as Doubts Grow Over Returns on AI Spending
Key Facts
The Associated Press estimated Nvidia shares were down 4.7% on Friday, October 30, 2026, at the time its report was published, and said the stock was the biggest drag on the S&P 500. The broader index was down 1.8% at the time and was at risk of erasing its October gains, despite reaching a record level during the month. Nvidia shares closed at $203.2488 on October 30, compared with a close of $213.66 the previous day, according to EL7 data. The decline came as investors questioned whether massive spending on artificial intelligence could generate enough profits and productivity to justify its cost. The agency cited investor concerns, saying they were asking whether “hundreds of billions of dollars will produce enough profits and productivity to make the investment worthwhile.”
Amazon’s results were among the sources of pressure on technology stocks, with its shares falling 2.3% after it reported weaker-than-expected summer earnings, according to the Associated Press. The company reported negative free cash flow of $42.4 billion over the 12 months through September 30, 2026. It also spent $94.8 billion on property and equipment in the third quarter, with most of the spending on artificial intelligence technologies, the agency said. These figures put major capital spending at the heart of investor concerns about returns, as the company’s shares fell after its results. The agency described the cash drain as a potential source of concern for investors, alongside earnings that were weaker than analysts’ expectations.
Intel shares, meanwhile, fell 30.1% on Friday, in a decline the Associated Press described as putting the stock near its worst day since 1974. The pressure came after the company gave fourth-quarter earnings guidance below analysts’ expectations. By contrast, Intel’s profit for the reported quarter exceeded analysts’ expectations, according to the agency, distinguishing the company’s performance in the quarter that ended from its outlook for the following period. Weak forward guidance weighed on its shares and the technology sector, while Nvidia shares fell in the same session. This comes in a market where questions are mounting about whether investments in artificial intelligence and data centers can generate returns, amid pressure linked to concerns that higher interest rates could constrain data center expansion.
The decline follows a month of volatile trading in AI stocks; on October 27, Nvidia shares rose 0.9% and were among the biggest contributors to gains in the S&P 500, according to the Associated Press. As for the company’s results, Nvidia revenue was $96.2 billion in the second quarter of its fiscal 2027, ended July 26, up 106% year over year. Data center revenue was $89.0 billion, up 117% year over year, according to the company’s announcement. The growth in this business, alongside investor questions about returns on spending, puts data center operations at the center of the market’s assessment of AI stocks. Nvidia scheduled a call to discuss its third-quarter fiscal 2027 results for November 17, 2026, at 2 p.m. Pacific time and 5 p.m. Eastern time.