More than $2 trillion in market value is set to be wiped from the Nasdaq 100 in October, as Big Tech earnings intensified investor scrutiny of whether the billions being poured into artificial intelligence can generate returns quickly enough.
The wipeout would amount to slightly more than the entire market value of SpaceX, according to Reuters’ calculation. The index has fallen more than 5.8% so far in October, ending two consecutive monthly gains and turning a market that had run on AI optimism into a market questioning the bill for it.
Earnings put the AI bill under scrutiny
The trigger was not a single company but a pattern across the quarter’s results. Alphabet, Meta and Amazon all raised spending forecasts further as they race to expand AI infrastructure — and investors punished the reports that showed the cost arriving faster than the payoff.
Alphabet suffered its biggest one-day percentage drop on record on Thursday after disappointing results in its core search-advertising business and a massive acceleration in cash burn. Meta’s plans for a record $97.5 billion fundraise heightened concerns about shareholder dilution and whether mounting AI spending could force other Big Tech companies to tap capital markets more heavily.
Microsoft broke from the gloom, with results that showed AI spending starting to pay off, even as it raised about $25 billion through a debt sale. That exception matters: it suggests investors are not rejecting AI spending outright, but are now demanding evidence, company by company, that it earns its keep.
The scale of the spending race
The numbers behind the October sell-off are on a scale that dwarfs most corporate budgets. Morgan Stanley forecast that capital spending on AI infrastructure overall will surpass a trillion dollars next year. J.P. Morgan expects global AI capital expenditure to reach $5.5 trillion by 2030, with $900 billion being spent in 2026 alone.
This year’s AI capital expenditure by Amazon, Alphabet, Meta, Oracle and Microsoft would likely equal their cumulative spend since the November 2022 launch of ChatGPT, J.P. Morgan analysts noted. In other words, a single year’s AI build-out now matches everything those five companies spent in the first four years of the generative-AI era combined.
That pace is also why borrowing costs have become part of the story. The prospect of ever-bigger AI outlays has unnerved investors, particularly as rising borrowing costs threaten to make debt-funded investment more expensive and harder to justify. Several companies have tapped the bond market to finance their investments, amplifying concerns that debt-funded spending will become harder to defend if returns stay slow.
A month, not a day
It is worth keeping October’s fall in proportion. The Nasdaq 100’s monthly drop follows a long run higher, and the S&P 500 and the Dow were headed for a positive month even as technology lagged. Nine of the 11 S&P 500 sectors were set for monthly gains, with technology and communication services the exceptions — communication services headed for its worst monthly showing since April 2022.
What changed in October was the question investors asked. Earlier in the year, the question was who could spend fastest on AI. After this earnings season, it is who can show the spending is paying — and how quickly.
What comes next
The test continues immediately. Apple is set to report next week and AI bellwether Nvidia is due in mid-November, and both results will be read as verdicts on the same question: is the AI build-out generating returns, or just consuming capital?
Beyond earnings, a heavy slate of corporate results, the monthly jobs report and the US midterm elections will further test a market that has grown wary of the AI trade. The latest turbulence stemmed from Alphabet’s results, but the questions it raised — about financing, cash burn and the timetable for returns — are likely to persist in the coming days.
For now, October’s $2 trillion figure stands as the month’s verdict: the AI trade has not collapsed, but its free pass has ended.
Frequently asked questions
How much has the Nasdaq 100 lost in October?
More than $2 trillion in market value is set to be wiped from the index this month, according to Reuters, with the index down more than 5.8% so far in October.
Why did tech shares fall in October?
Big Tech earnings intensified scrutiny of AI spending: Alphabet, Meta and Amazon raised spending forecasts, while Alphabet’s disappointing search-advertising results and cash burn, and Meta’s $97.5 billion fundraising plan, unnerved investors about returns and dilution.
Is this the end of the AI trade?
Not on this evidence. Microsoft’s results showed AI spending starting to pay off, and the S&P 500 and Dow were headed for positive months. What has changed is that investors are now demanding company-by-company evidence of returns.
Sources: Reuters, “Nasdaq faces $2 trillion wipeout in October as AI spending fears deepen”, October 30, 2026; Reuters, “Nasdaq futures tumble as Amazon, Intel results deepen AI spending woes”, October 30, 2026.
Related coverage
Sources
- Reuters: Nasdaq faces $2 trillion wipeout in October as AI spending fears deepen
- Reuters: Nasdaq futures tumble as Amazon, Intel results deepen AI spending woes
