Intel, Reddit plunge 29% as Nasdaq suffers worst-fall since June

Concerns over hyperscalers' increasing capital-spending share

The Nasdaq composite index witnessed its worst fall since June, with major tech companies like Intel and Reddit taking a huge hit. Intel's shares plummeted by 29%, while social media platform Reddit saw a decline of the same percentage. Sandisk, a chipmaker that has greatly benefited from the AI capital-spending boom this year, also witnessed a drop of 13%.

The market selloff wasn't limited to chipmakers and social media platforms.

Major players in the AI buildout, such as Microsoft, Meta Platforms, Amazon, and Alphabet (Google's parent company), also saw their shares fall by 1% to 2% on Friday.

This came after significant declines earlier in the week.

According to Capital Economics, the four so-called hyperscalers (Microsoft, Meta Platforms, Amazon, and Alphabet) have been responsible for over a third of all capital spending by current S&P 500 constituents in the last year.

Their share is likely to increase further, which is causing concern among investors.

John Higgins, a markets economist at Capital Economics, said this trend is becoming partly dependent on external financing, making investors more anxious about their collective investments.

The Nasdaq 100 index, which tracks large non-financial stocks, fell by a whopping 3.5%.

This was after an earlier decline, bringing it close to a correction, a term used when an asset or market falls by at least 10% from its recent high.

The broader Nasdaq composite is down by 7.8% from its closing high after witnessing its worst month since March 2025.

Brian Jacobsen, chief economic strategist at Annex Wealth Management, said investors are voting all of a sudden and all together on who will monetize the investment and who won't.

This statement highlights how the market is reacting to these recent developments.

The selloff has also affected other risk assets beyond tech shares that have previously benefited from positive sentiment.