In one session, Alphabet lost about $500 billion in market value, ServiceNow fell 25%, and Intel dropped more than 20% after hours. The common concern was whether AI spending will pay off. For India, the effects are mixed: IT services are directly at risk, while the wider market could benefit if global investors move money away from AI-heavy markets.
Thursday was one of the worst days for US technology stocks this year, and the losses continued after the close.
During the regular session, Alphabet fell 12.64%, its largest one-day drop on record, wiping out about $500 billion in market value.
The Google parent missed revenue and profit expectations, reported slower growth in its core search advertising business, and posted negative free cash flow because of $51 billion in quarterly capital spending. The shares are now down for 2026.
Software stocks fell with it. ServiceNow dropped 25% and Fortinet 21%, even though both beat earnings estimates. Investors focused instead on ServiceNow’s slowing bookings and Fortinet’s weaker services growth. The Nasdaq fell 1.38% to 26,184.73.
After the close, Intel’s results caused another sharp fall.
Intel’s drop
Intel beat estimates, with adjusted earnings of 52 cents a share on revenue of $16.5 billion. But its guidance for the December quarter was well below expectations, and chief financial officer David Zinsner said the PC slowdown would continue at least through the first half of next year. The shares fell about 21–23% after hours, to around $72 from a close of $92.07.
Intel had several problems at once. The PC market is weak, partly because rising memory chip prices have made PCs more expensive. An explosion this month at its factory in Kiryat Gat, Israel, has disrupted production. Its foundry business, which makes chips for other companies, is losing money and faces competition from TSMC for major contracts. And it needs heavy capital spending in 2027.
Before the results, Intel was up about 150% this year on enthusiasm for AI. It had already fallen about 23% in October. The after-hours drop shows how quickly sentiment can reverse when a richly valued stock disappoints.
Amazon also fell about 7% after hours, completing a week in which Meta, Alphabet, Amazon and Intel were all sold heavily after their results.
What it means for India
ServiceNow is one of the largest platforms that Indian IT companies implement for clients. Infosys, TCS, HCL Tech and Wipro all have large ServiceNow practices. If ServiceNow’s bookings are slowing, its partners will get fewer new implementation projects.
The broader concern is the same one that has weighed on Indian IT all year: that AI will cut into the labour-intensive services model rather than add to it. The Nifty IT index fell about 3.9% on Wednesday and is down roughly 25–30% in 2026 and more than 40% from its December 2024 peak. Thursday’s US selloff makes a recovery harder in the near term.
Intel’s guidance will also have an impact on engineering research and design companies, such as LTTS, Tata Elxsi, Cyient and HCL Tech’s engineering business. They do chip design, verification and product engineering for semiconductor and hardware clients. If Intel expects the PC slowdown to last until mid-2027 and is under cost pressure, it and its peers are likely to cut outsourced engineering work. Intel also has one of its largest research centres outside the US in Bengaluru.
India has few direct AI stocks, but several groups have gained from the global AI buildout: data centre operators, server makers such as Netweb, and power equipment companies supplying grids that serve data centres. If investors become more sceptical about AI spending, these stocks could be revalued.
Overall Indian markets could gain?
There is a potential benefit. India has been one of the weakest markets in 2026, down about 13% while AI-heavy markets such as Korea, Taiwan and Japan surged. Foreign investors sold about ₹3 lakh crore of Indian shares this year, partly to buy AI-linked stocks elsewhere.
If the AI trade keeps unwinding, that money has to go somewhere. US investors on Thursday moved into healthcare, industrials and bonds. Globally, a market with little AI exposure, strong domestic demand and valuations that have already fallen could start to look attractive. India’s lack of AI stocks, a disadvantage for most of this year, could become an advantage.
Korea’s Kospi fell 21% in a month as AI stocks reversed, and that money did not flow to India, because oil at $115 and a weak rupee have kept foreign investors away. As long as oil stays this high, India is unlikely to benefit fully from any move out of AI stocks.
What to watch today
The Nifty IT index is likely to open under pressure. Pay attention to how heavily held IT stocks such as Infosys and TCS trade relative to mid-sized IT firms with more AI exposure. The rupee and US bond yields also matter: Thursday’s move into Treasuries pushed yields down, which, if it lasts, would ease some pressure on emerging-market currencies.
The longer-term question is whether this is a pause in the AI trade or the start of a broader reassessment. Strong demand for Microsoft’s $25 billion bond sale on Thursday suggests investors are still funding AI, but they are now much more selective about which companies they back.
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