Equities

Tech steadied after Thursday's AI rout, but the Nasdaq still closed lower

A midday tech bounce faded by the close as investors kept weighing the cost of AI spending, while a Bloomberg report on SpaceX's wireless plans hit telecom stocks.

By Marcus Rodriguez · Oct 25, 2026, 6:40 AM EDT

Why it matters: Worries over AI spending are still moving the Nasdaq, and next week's Alphabet, Microsoft and Amazon results will show how much those companies plan to keep spending.

For information only, not investment advice. Prices delayed.

Tickers: AMZN

Tech stocks spent Friday trying to recover from Thursday's selloff. By the closing bell, they had only partly managed it. Wall Street's main indexes closed lower on Oct 23 even as technology shares steadied somewhat, Reuters reported, and the tech-heavy Nasdaq Composite ended with a slim loss.

That's a different picture from midday, when Reuters reported the Nasdaq edging higher on signs of stabilization in some tech stocks, with chip-related names gaining. The bounce didn't survive the afternoon. The S&P 500 technology sector still finished in the green, but most S&P 500 sectors fell, including consumer staples, consumer discretionary and financials, according to Reuters.

Why tech needed steadying

Thursday was rough. The Nasdaq logged its biggest one-day drop since June, as concerns flared over the cost of financing heavy AI investment, Reuters said. The slide picked up after Meta reported its first cash outflow in more than a decade, amid worries about its AI-related spending.

It fits a pattern. AI-related shares have swung sharply this month, Reuters noted, first coming under pressure over CoreWeave's debt burden and the cost of financing AI build-outs.

Strategists aren't pretending the worry has gone away. James O'Day, head of equities at Citizens Bank, told Reuters:

Investors are still trying to wrap their heads around the sheer size of this AI spend. The sheer size of these notional dollars is staggering, but we aren't at the point of the cycle yet that we've seen this return

Kristina Hooper, chief market strategist at Man Group, told Reuters: "There is still fallout from the questioning of the AI trade." She added that there's potential for less to be invested in AI data centers next year than has been projected. "So I certainly think that's giving pause."

Meanwhile, in telecom

The other drag on Friday came from SpaceX. Telecom stocks fell, weighing on the communication services sector, after Bloomberg News reported late Thursday, citing sources familiar with the matter, that SpaceX was in talks to access at least 80,000 cell sites to build a wireless carrier from scratch, according to Reuters. Tower operators and SpaceX did not immediately respond to Reuters' requests for comment.

Tower operators went the other way, with Crown Castle and American Tower gaining, Reuters said. Bloomberg's report identified Crown Castle as one of the companies SpaceX was in talks with. Bernstein analysts were measured: "The competitive impact may still be years away, but anticipation alone, reinforced by each successive spectrum and infrastructure move, is likely to remain an overhang on sector sentiment."

The real test is next week

About one-third of S&P 500 companies report quarterly results next week, including Alphabet, Microsoft and Amazon ($AMZN), three AI hyperscalers whose capital spending forecasts will be closely watched, Reuters said. Amazon shares were down 0.95% at $248.00 as of Oct 23, 4:00 PM ET. A Federal Reserve rate-policy meeting is also on the calendar.

So Friday settled less than it seemed at lunch. Whether the AI spending boom keeps getting the benefit of the doubt now rests with the hyperscalers whose capital spending forecasts Wall Street will be watching next week.

Tags: markets-moves · ai · big-tech · earnings