Tech stocks crushed as Nasdaq tumbles nearly 1,000 points

Stock futures for the Nasdaq Composite Index cratered before the opening bell on Friday, tumbling nearly 800 points, or 2.7%, after disappointing earnings reports from Alphabet, Amazon and Intel renewed fears about the prospects for artificial intelligence. 

Intel's stock plunged more than 26% ahead of trading, while Alphabet shares continued to wobble after sliding more than 12% on Thursday, their worst day since the company went public as Google in 2004. 

"This has been one of the worst tech earnings seasons in memory, with underwhelming results from a slew of very prominent companies," market analyst Adam Crisafulli, head of Vital Knowledge, said in a research note. 

Futures for the S&P 500 and blue-chip Dow Jones Industrial Average were down 1.1% and 0.1%, respectively. 

The weaker-than-expected tech earnings reports are heightening concerns that massive investments in AI will not generate the payoff Wall Street expects. Investors are also worried about the debt companies are taking on to finance data center capital expenditures and whether that debt is sustainable.

Investors have been banking on the AI trade to continue propelling the stock market to record highs. However, that view appears to be under threat. In a report earlier this week, Ulrike Hoffmann-Burchardi, CIO Americas and global head of equities for UBS' Chief Investment Office, advised clients to "diversify beyond AI."

"While we maintain a constructive outlook on the structural growth of the AI theme, high expectations and potentially wide differences in company outcomes underscore the risks of single-stock concentration," she said. "We think investors should ensure their equity portfolios are broadly diversified." 

Edited by Alain Sherter

The Associated Press contributed to this report.

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Google parent company's stock falls nearly 13% in worst day since company went public