Google and Intel Wipe Out $630 Billion as AI Bubble Fears Spook Investors

Two massive stock selloffs at Google and Intel are shaking the entire technology sector, raising fears that the artificial intelligence boom may be cooling. Google has lost more than $500 billion in market value since Thursday, while Intel has seen $130 billion evaporate. The shockwave is spreading across the industry, dragging down Nvidia, Amazon, SpaceX, and key chipmakers Samsung and SK Hynix. The earthquake began Thursday when Google reported its quarterly results. The company revealed that profits from its search engine—which still generates half of total revenue—fell 12% after integrating AI into search results through its "AI Mode." Adding to the pain, Google reported negative free cash flow of $9.065 billion, an unprecedented figure for the company. Overall profits dropped 25% year-over-year, despite revenue rising 25%. CEO Sundar Pichai tried to reassure shareholders by comparing the moment to the shift to mobile phones, when the company prioritized product development before monetizing it. It was not enough. Google's shares plunged 12.6% in a single day—the largest daily drop since the 2008 financial crisis and the second-largest in the company's history, surpassed only by Nvidia's crash in January 2025 following the rise of DeepSeek. Intel suffered an even sharper blow. The U.S. chipmaker is losing nearly 30% of its stock value, destroying a recovery it had built over the past six months with support from the Trump administration and major contracts from Nvidia and Google. Intel warned investors it will keep increasing spending next year to close its gap in advanced AI chip manufacturing, meaning it will not generate positive cash flow until 2027. Strong quarterly results—profits up 21% year-over-year—and a dividend increase from $0.41 to $0.51 per share failed to soften the fall. Investors are punishing these investment plans severely, and their support is critical for the entire sector. The U.S. needs Intel, its only advanced chipmaker, to maintain its edge over China and as a safety net if conflicts disrupt supply from TSMC's factories in Taiwan. The damage is rippling worldwide. SpaceX and Micron fell 5%, Nvidia and Amazon dropped 3%, and memory maker SanDisk lost 10%. In Asia, Taiwan's stock exchange fell 5% and South Korea's dropped 3.5%. The most telling casualty is Reddit, which has fallen 34% since Thursday. The forum depends heavily on traffic from Google, and its daily users dropped from 53 million to 50 million last quarter—the second consecutive decline. CEO Steve Huffman told shareholders the company will now require users to log in to browse the platform, citing better ad targeting and protection of Reddit's "extremely valuable data corpus."