US equity markets opened sharply lower on Friday as a tech-led sell‑off rippled through growth names. The Nasdaq fell about 1.2%, the S&P 500 lost 0.9% and the Dow dipped 0.8% at the open, reflecting renewed investor caution around capital‑intensive AI infrastructure and mixed corporate guidance.
Large technology stocks led declines: Microsoft and Nvidia were each down more than 2%, adding to recent volatility in chip and software markets after Nvidia’s earnings cycle heightened scrutiny of margins and demand for GPUs. Sentiment across software and semiconductor names has become especially sensitive to signs that spending on AI farms may be large, lumpy and slower to monetize than investors had hoped.
Small but strategically positioned providers of GPU cloud capacity suffered the steepest falls. CoreWeave plunged more than 13% after investors reacted to the company’s disclosure of hefty capital expenditure plans, underscoring the financing risks for firms that are racing to build the physical infrastructure demanded by generative AI workloads.
Elsewhere, Duolingo plunged roughly 19% after trimming its bookings outlook for the first quarter and full year, signalling that even consumer‑facing AI adoption and monetization can disappoint. By contrast, Netflix jumped more than 10% after announcing it was withdrawing from the bidding contest for Warner Bros., a move investors read as sharpening the company’s focus on its streaming business and avoiding a costly media consolidation battle.
The market action highlights two concurrent narratives: one, that building the data‑centre and GPU capacity to run large language models is capital intensive and exposes providers to execution and financing risk; and two, that content and distribution strategies in streaming continue to reshuffle as companies choose either to invest aggressively in M&A or to double down on organic growth.
For global investors, the episode is a reminder that AI is not a uniform win for technology stocks. Hardware suppliers such as Nvidia remain central to the ecosystem, but the economics of downstream operators—from specialised cloud hosts to consumer apps—are diverging. Market participants will be watching upcoming corporate guidance, CapEx plans and any shading of demand for GPU chips as bellwethers for the next leg of tech risk appetite.