NEW YORK — The Nasdaq closed Friday at 24,976, down 0.6 percent, underperforming the Dow Jones Industrial Average, which gained 0.5 percent to 51,947. The S&P 500 finished flat at 7,412. The divergence reflects growing investor skepticism toward AI infrastructure spending.
Chip stocks led the S&P 500 technology index lower. Intel dropped nearly 8 percent despite projecting quarterly profit and revenue above Wall Street estimates—a sharp disconnect that signals fading confidence in the AI growth trade.
Concerns over AI spending escalated after Alphabet announced plans to raise capital expenditure, stoking questions about return on investment for aggressive infrastructure buildouts. Alphabet closed Friday at $319.74, up 0.6 percent, but the earlier announcement weighed on the broader sector.
Richard Reyle, chief investment officer at Questar Capital Partners, said investors are rotating into safer parts of the market. Reyle specifically cited pharmaceuticals, noting the sector "has been flying" as a direct beneficiary of the shift.
As earnings season approaches, companies with less exposure to heavy AI infrastructure costs may find favor with investors prioritizing stable returns.
