Nvidia Stock Slides 3% as AI Spending Fears Grip Wall Street, but Amazon's Bigger 2027 Budget Offers Hope

Nvidia shares fell about 3% on Friday as a wave of selling swept through technology stocks, with investors growing uneasy about the enormous cost of the artificial intelligence boom even as one of Nvidia's biggest customers signaled it would spend even more next year.

The stock traded at $207.32 shortly before 10:45 a.m. EDT, down $6.34, or 3%.

The decline was modest compared with other chipmakers. Intel plunged more than 27% and AMD fell more than 8%, but Nvidia's limited exposure to the personal computer market cushioned it from Intel's grim PC warning.

AI spending anxiety spreads

Friday's selling was driven largely by concern over AI costs. Amazon and Intel shares tumbled on disappointing results, dragging down the broader tech sector after a three-day rally earlier in the week.

Investors had already been rattled by Alphabet. Its shares fell 12.64% on Thursday after a second straight quarter of negative free cash flow, erasing about $500 billion in market value. Nvidia dipped 0.8% that day.

Amazon added to the unease after reporting a free cash outflow of $42.4 billion over the past 12 months. Its third-quarter capital spending reached $77.3 billion, well above the $58.7 billion analysts expected.

A paradox for Nvidia

The spending that is spooking investors is also Nvidia's main source of revenue. Nvidia supplies the graphics processors at the heart of AI data centers.

Amazon CEO Andy Jassy said on the company's earnings call that Amazon expects to "spend meaningfully more in 2027." That should translate into more orders for Nvidia, whose data center revenue rose 117% to $89 billion in its latest quarter.

There is a catch. Jassy also said commitments for Amazon's own Trainium chips have grown more than 20-fold, a reminder that big cloud companies are increasingly building their own alternatives to Nvidia's products.

Amazon kept its forecast for about $220 billion in 2026 capital spending.

Why spending worries hurt anyway

Analysts said the market's reaction reflects doubts about whether the massive investments will produce adequate returns. When investors question whether hundreds of billions in AI spending will pay off, they tend to discount the revenue that spending generates, much of which flows to Nvidia.

Neocloud operator CoreWeave, a major Nvidia customer that borrows heavily to build data centers, fell more than 9% Friday.

The financing question has hung over the sector for weeks. Earlier this month, Nvidia CEO Jensen Huang said he saw no need for Nvidia to backstop CoreWeave, adding that the company's cost of capital was falling.

Smaller hit from PC slump

Intel's warning that the PC market will shrink 12% in 2026 and 10% in 2027 weighed heavily on PC-focused companies. Nvidia's AI GPU business takes less of a direct hit from that slowdown.

Still, the broader chip sector was weak. The iShares Semiconductor ETF dropped about 7% in premarket trading.

Broader market slides

The Nasdaq composite fell 2.2% and the S&P 500 dropped 1.1% shortly after the open, while the Dow Jones Industrial Average slipped 0.2%.

Pressure has been building across AI stocks for weeks. In mid-October, 20 of the world's most valuable AI and semiconductor stocks lost more than $1 trillion in value in a single week amid worries about AI financing.

Bulls see demand outpacing supply

Despite the volatility, demand for AI computing remains strong. By October 2026, demand for AI computing power was exceeding supply, pushing up prices for capacity.

Amazon's cloud backlog grew to $578 billion from $496 billion at the end of the second quarter, according to Jassy, a sign that customers continue to commit to long-term AI infrastructure contracts.

For Nvidia, the near-term question is whether investor anxiety about AI returns continues to outweigh the reality of rising orders from its biggest customers. Upcoming earnings from chip peers, including AMD on Nov. 3, will offer more clues on how the AI buildout is holding up.