While the Nasdaq dropped 3.5% in Friday trading, it remained up 7.6% over the last year. One company committed to spending $220bn this year, putting the funds toward investments including AI data centres, network equipment, and servers.
Reddit stock fell by 26% after the social media platform reported weaker-than-expected daily user figures and warned that Google's growing AI-driven search was hurting referral traffic.
Amazon revealed on Thursday that it had spent more cash than it was making, with spending having increased six-fold over the span of three months.
The market downturn followed warnings that some tech firms would not be able to justify sky-high valuations if the costs of building AI data centres and developing software exceeded the revenue generated.
Tech firms continued spending heavily on AI even as their earnings did not always meet analysts' expectations, which spooked investors and created fears of an AI bubble.
Tech stocks tumbled for the second day in a row as concerns rose over the hundreds of billions of dollars firms are investing in artificial intelligence.
Brookes noted that November is typically a strong month for stocks.
While the Nasdaq is down 3.5% in Friday trading, it is up 7.6% over the last year.
Reddit stock was down by 26%, after the social media platform revealed weaker-than-expected daily user figures and warned that Google's growing AI-driven search was hurting referral traffic.