New York, February 5, 2026, 11:04 (EST)
- U.S. stocks slipped further, dragged down by tech shares, as investors digested AI spending concerns and braced for upcoming earnings reports. 1
- Alphabet topped estimates, yet early market talk fixated on its hefty AI spending plans. 2
Wall Street dipped again Thursday, dragged down by tech stocks as worries resurfaced over the costs tied to AI development, with Alphabet and Qualcomm leading the declines. At 9:41 a.m. ET, the Dow was off 0.56%, the S&P 500 had fallen 0.51%, and the Nasdaq slipped 0.50%. Alphabet dropped 2.6%, while Qualcomm plunged about 8%. Melissa Brown from SimCorp called the AI trade “perhaps the extinguisher this year.” 3
Concerns center on capital spending — or “capex” as traders call it — the money firms pump into data centers, chips, and servers to build and operate AI models. Alphabet told investors it plans to spend between $175 billion and $185 billion on capex in 2026. CEO Sundar Pichai said, “We are seeing our AI investments and infrastructure drive revenue and growth across the board.” 4
Concerns have crept into the software sector, as investors debate if new AI tools might erode demand for older subscription-based products. The S&P 500 software and services index fell 1.8%, wiping out over $800 billion in market value across the last six sessions. Societe Generale strategist Manish Kabra noted that “the market is questioning” whether the software earnings model faces disruption. 5
Wednesday’s trading revealed a clear divide: chip and AI-related stocks tumbled sharply while investors moved into cheaper sectors. The S&P 500 ended down 0.51%, and the Nasdaq dropped 1.51%, even as the Dow gained 0.53%. AMD plunged 17% after its revenue forecast shook investor confidence. Jed Ellerbroek, portfolio manager at Argent Capital, summed it up: “The market is suddenly skeptical and concerned.” 6
Qualcomm shook the market again after projecting Q2 revenue between $10.2 billion and $11.0 billion, falling short of analysts’ consensus of $11.12 billion. The company blamed a global memory shortage weighing on smartphone clients. CEO Cristiano Amon told Reuters, “I just wish we had more memory.” 7
Economic data weighed on sentiment. Weekly jobless claims climbed 22,000 to 231,000, according to Labor Department figures. Carl Weinberg of High Frequency Economics noted “there is no sign” of layoffs typical of a recession. The government’s January jobs report, postponed by last week’s shutdown, is now scheduled for February 11. 8
Pressure extended beyond stocks. Silver plunged up to 15%, and oil dropped over $1 a barrel amid a wider sell-off. OCBC strategist Christopher Wong noted, “Sentiment has turned soggy across most asset classes,” while IG’s Tony Sycamore described this week’s volatility as “aftershocks.” 9
The upcoming earnings calls might still turn things around. Should Amazon and other major investors lay out a solid link between AI spending and future profits, the market could bounce back quickly. But if costs keep climbing while growth slows, the tech sell-off could deepen into something more chaotic.
