Meta’s expanding AI infrastructure bill rattled U.S. technology markets on Oct. 22, pulling the Nasdaq Composite down 2.6% in its steepest one-day decline since June and sending semiconductor shares into a sharper retreat. The selloff came as Meta raised its 2026 capital-spending outlook and disclosed roughly $825 billion in future commitments covering leases, computing capacity and energy agreements.
Meta shares fell about 7%, cutting approximately $124 billion from the company’s market value in a single session despite third-quarter revenue and earnings that exceeded Wall Street expectations. The market reaction showed how quickly strong current results can be eclipsed by concern over the cost of financing the next phase of AI expansion.
The Philadelphia Semiconductor Index dropped 6.7%, while the iShares Semiconductor ETF, known as SOXX, finished down nearly 7% after rising about 2% a day earlier. The reversal hit chipmakers, memory suppliers, networking companies and server providers that have become closely associated with the surge in AI data-center construction.
Meta’s spending plans overshadow earnings beat
Meta reported third-quarter revenue of $64.6 billion, up 26% from a year earlier, and earnings per share of $3.83. Analysts had expected $3.57 per share, according to the figures provided with the company’s results.
The company raised the lower end of its 2026 capital-expenditure forecast by $5 billion, setting a new range of $135 billion to $145 billion. Those outlays are directed largely toward the computing infrastructure needed for artificial intelligence products, including data centers, servers and related power capacity.
Its disclosed future commitments reached about $825 billion, a figure that includes leases, computing-capacity agreements and energy contracts. Meta also announced a new class of non-voting shares that could be used for financing, employee compensation and possible acquisitions.
The combination places greater attention on the financing burden behind the AI race. Large technology companies have largely funded infrastructure expansion with cash flow and strong balance sheets, but the scale of multiyear commitments increasingly brings credit markets into the debate.
Bloomberg data showed Meta’s five-year credit-default swap spread, a measure of the cost to insure against a borrower’s default, rose about 8.9 basis points intraday to roughly 119.3 basis points, a record high. A wider CDS spread does not signal an expectation of default, but it does indicate that hedging Meta’s debt became more expensive during the market turbulence.
Semiconductor equipment shares take the hardest hit
The heaviest losses were concentrated among companies that supply the physical equipment behind AI computing capacity. Lam Research closed nearly 12% lower, while KLA declined by roughly 10% or more. Applied Materials fell 8.2%.
Those businesses sell tools used to manufacture increasingly advanced chips. Their shares often move sharply when markets reassess spending by chip producers and major cloud operators, because equipment orders can be sensitive to changes in long-term expansion plans.
Major chip companies also declined. Broadcom fell 4.3%, Marvell Technology dropped 8.7%, Intel lost 8%, and U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. slid 4.5%.
Memory and storage names were caught in the same move. Sandisk fell 8.5%, U.S.-listed SK Hynix shares lost 8.1%, Seagate declined 7.9%, Western Digital dropped 6.4%, and Micron ended down 6.3%. AI systems require large volumes of high-bandwidth memory and data storage, making those suppliers a frequent way for traders to express views on demand for new data centers.
The selling also reached companies supplying optical components and networking links for AI clusters. Coherent fell 12.5%, Lumentum dropped 11.5%, Credo lost 10.7%, and Corning declined 8.1%.
AI-focused cloud and server companies also finished lower. CoreWeave fell about 10%, Nebius dropped 7.2%, Dell lost about 6.8%, Super Micro Computer declined 5.2%, and Oracle ended roughly 2.8% lower.
CoreWeave’s bonds due in 2032 traded slightly below 80 cents on the dollar, compared with about 90 cents last month, according to the market pricing cited in the supplied material. The bonds saw little change from Oct. 21, suggesting that the day’s equity selloff added to an existing concern over the economics and financing requirements of AI infrastructure rather than creating it.
Oil shock drives flight into Treasurys
Technology spending fears unfolded alongside an abrupt geopolitical move in energy and bond markets. Brent crude traded above $110 a barrel intraday after concern increased about a broader Middle East conflict following an attack in Saudi Arabia.
Higher oil prices can complicate the inflation outlook, but the immediate trading response favored U.S. government debt as traders sought safer assets. The 10-year Treasury yield fell more than 19 basis points, dropping below 5% for the first time in about a month. It was the note’s largest one-day yield decline since March 2023.
Yields at some other maturities dropped by as much as about 20 basis points, producing what the supplied market account described as the strongest day for Treasurys in more than a year. Bloomberg also reported that interest-rate markets had fully priced the next 25-basis-point Federal Reserve rate increase for January rather than December.
That repricing creates a more complicated backdrop for risk assets. Lower Treasury yields can support long-duration technology shares by reducing the discount rate applied to expected future earnings. In this session, concern over capital requirements, bond-market stress and geopolitical risk outweighed that potential benefit.
Big tech earnings will test the spending case
The next evidence on AI spending will come from quarterly reports by Alphabet, Microsoft and Amazon. Their capital-expenditure guidance will show whether Meta’s revised budget is an isolated decision or part of a broader escalation in spending on data centers, chips and power supplies.
The reports will also help traders distinguish between companies with large internal cash generation and businesses that may require more external financing to build AI capacity. That distinction has become increasingly relevant for suppliers and infrastructure providers whose revenues depend on aggressive expansion plans continuing for years.
Crypto markets may take cues from the same risk appetite that drives high-growth technology equities, particularly for tokens linked to AI, decentralized computing or data-network themes. Yet the supplied material provides no evidence that Bitcoin or the broader digital-asset market moved in lockstep with the Nasdaq on Oct. 22. The immediate market signal came from listed technology and credit markets: traders are demanding clearer evidence that unprecedented infrastructure budgets can produce returns proportionate to their cost.
Concerned about tech volatility and AI infrastructure spending? Explore diversification with crypto by using our crypto trading guide today.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
