U.S. technology stocks fell on Thursday, October 22, after Meta’s earnings and high artificial-intelligence costs renewed concerns about whether the industry’s large investments would produce returns, and the Nasdaq dropped 2.6%, its biggest one-day fall since June.
Meta shares fell 7%, even though its results beat analysts’ expectations. Investors focused on the company’s cash flow and plans to keep funding AI development. Meta reported third-quarter revenue of $64.6 billion, up 26% from a year earlier.
Its free cash flow turned negative at $2.12 billion. Meta’s spending on long-term assets, including payments on finance leases, reached $34.91 billion. That exceeded the $32.79 billion generated from its operating activities.
The shift to negative cash flow increased scrutiny of the cost of building AI infrastructure and when it might produce returns. Semiconductor stocks also fell. The Philadelphia Semiconductor Index dropped 6.7%, and shares of AMD, Micron and Nvidia fell.
The S&P 500 lost 1.21%, while the Dow edged up 0.02%. This showed that the day’s losses were concentrated in technology stocks. Tesla shares also fell, despite the company reporting positive free cash flow and reducing its spending plans for 2026.
This suggested investors were questioning the broader race to invest in AI, not just Meta’s results.