U.S. stock futures were mixed on Thursday, with technology shares under pressure as investors questioned whether major companies can generate sufficient returns from their expanding artificial intelligence infrastructure investments.

At 5:18 a.m. ET, Nasdaq 100 E-minis were down 303 points, or 1.01%. S&P 500 E-minis fell 0.26%, while Dow E-minis advanced 0.51%.

The market reaction reflected growing sensitivity to the relationship between AI-related capital expenditure and revenue growth. Investors have become less willing to overlook rising infrastructure costs without clearer evidence that spending is translating into sustainable financial returns.

Alphabet Leads Technology Sector Weakness

Alphabet shares fell 10.2% in premarket trading after its latest results highlighted weaker-than-expected search advertising performance and a substantial increase in cash burn as AI spending accelerated. If the losses persisted, the decline could erase more than $400 billion in market value.

The reaction intensified concerns about the scale of investment required to expand AI computing capacity and the time needed to generate adequate returns.

Microsoft offered a contrasting picture, rising 3.6% after reporting stronger-than-expected Azure revenue and free cash flow. Its results provided evidence that enterprise demand for cloud and AI services can support both revenue growth and cash generation.

The contrasting performances suggest investors are increasingly differentiating between companies based on their ability to demonstrate financial returns from AI spending.

Software and Semiconductor Stocks Under Pressure

Weakness extended beyond Alphabet across software, cybersecurity and semiconductor shares.

Fortinet dropped 25% after reporting third-quarter results, while ServiceNow fell 18.2% after missing profit estimates. Zscaler and Salesforce also traded lower amid broader weakness in software-related stocks.

Semiconductor shares declined as well. Marvell Technology fell 9.7% following reports that it was in advanced talks to acquire data-center optics maker Lumentum Holdings, whose shares gained 4.2%. Micron Technology dropped 3.3%, while Nvidia, AMD and Intel fell 0.7%, 2.8% and 3.7%, respectively.

The moves reflected pressure across technology stocks as investors reassessed valuations, earnings performance and the capital requirements associated with AI infrastructure.

Federal Reserve Policy and Inflation Data in Focus

The Federal Reserve left interest rates unchanged on Wednesday, as expected, while waiting for additional inflation data. The decision followed a period of elevated price pressures and uncertainty surrounding the economic outlook.

Investors were focused on the September PCE inflation report, the central bank’s preferred inflation gauge, as well as third-quarter GDP data. Both releases could influence expectations for the next policy decision.

According to the CME FedWatch Tool, traders were pricing in a probability of more than 81% that the Fed would raise rates in December. Money market participants were also anticipating another increase by mid-2027, based on LSEG data.

Higher borrowing costs could add pressure to technology companies financing large infrastructure projects through debt, making inflation and interest-rate expectations particularly relevant to the AI investment outlook.

What Investors Should Watch Next

Investors will assess the incoming inflation and growth data alongside earnings from major technology companies. Amazon and Intel were scheduled to report after Thursday’s market close, potentially providing additional insight into cloud demand, semiconductor conditions and AI-related spending.

The key question remains whether AI-driven revenue growth can justify the scale of infrastructure investment. Companies demonstrating stronger cash generation may continue to attract investor support, while those facing rising costs without comparable financial returns could remain vulnerable to market volatility.