Global AI Stocks Slide as Earnings Disappoint and Spending Fears Resurface

AI-related equities tumbled across the globe on October 22, 2026, after a wave of underwhelming earnings reports renewed fears about the profitability of massive AI investments. Nasdaq futures fell 1.7%, South Korea’s Kospi closed down 3.5%, Lam Research dropped 8.5% and IBM fell 5.4% in premarket trading, while Meta was the lone bright spot with a 1% gain on bullish signals for its Muse AI product. Analysts say sky-high expectations are making it nearly impossible for AI companies to impress investors.

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The Scene: A Relief Rally That Ended Before It Began

Wednesday brought a brief reprieve. Markets had rallied, and investors were willing to believe that the AI trade still had room to run. By Thursday morning, that relief had evaporated.

Nasdaq futures dropped 1.7%, abruptly halting the previous session’s rebound as a cluster of AI earnings releases landed poorly. The selloff was not confined to the United States. AI stocks fell across Europe and Asia, with South Korea’s memory-chip-heavy Kospi closing down 3.5%. The message from the market was blunt: the bar for AI earnings has been set so high that even solid results are no longer enough.

The Earnings That Broke the Rally

The disappointing reports came from names at the center of the AI supply chain. Lam Research, a key semiconductor equipment maker, fell 8.5% in premarket trading despite reporting AI-driven demand that lifted first-quarter sales by more than 50%. The problem was not the past quarter but the guidance: the company’s second-quarter outlook landed merely in line with analyst expectations, offering no upside surprise to justify a higher multiple.

IBM dropped 5.4% in premarket trading, adding to the pressure on enterprise technology names. The pattern was consistent: companies exposed to AI infrastructure and enterprise spending were punished for anything short of a blowout.

Meta and Muse: The Exception That Proved the Rule

There was one notable exception. Meta Platforms rose 1% in premarket trading, helped by bullish signals on adoption of its Muse AI agent. More than 10 million people in the U.S. and Canada had set up Muse accounts within a month and a half of launch, and the company forecast fourth-quarter revenue above Wall Street estimates.

Yet even Meta’s gain came with an asterisk. The stock had already soared to a 52-week high near $780 after Muse launched in September, and CEO Mark Zuckerberg acknowledged that Muse and Reality Labs are not yet generating profit. Meta’s relative strength underscored how little room the rest of the sector had for error.

The Macro Backdrop Made It Worse

The AI earnings disappointment did not unfold in isolation. Oil prices climbed above $112 a barrel after renewed attacks on Saudi energy infrastructure raised fears of a wider conflict, and French government bonds sold off sharply, with the spread between French and German 10-year yields widening to 164 basis points, the highest since 2011.

Those pressures pushed investors toward Treasurys and away from risk assets. The dollar weakened, bitcoin fell 3%, and gold slipped 1%. The Stoxx 600 in Europe was down 0.9% in early trade, and S&P 500 futures fell 1% alongside the Nasdaq decline. AI stocks were not the only casualty, but they were the most exposed.

What the Selloff Is Really Saying

The analyst comment that captured the mood came from Quilter Cheviot’s head of technology research, Ben Barringer: “The problem here is that expectations are quite high going into the quarter. It’s a difficult setup because you’ve got to smash it out the park to get your stock to work”.

That is the core of the story. The AI trade has been priced for perfection, and the earnings season is revealing that perfection is hard to deliver quarter after quarter. Capital spending on AI infrastructure remains enormous, but investors are now asking when that spending translates into profit rather than simply revenue growth. When the answer is “not yet,” the stocks pay for it.

Key Takeaways

1. Nasdaq futures fell 1.7% as a wave of AI earnings disappointments ended Wednesday’s relief rally.

2. South Korea’s Kospi closed down 3.5%, leading declines across Asia.

3. Lam Research fell 8.5% in premarket trading despite strong AI-driven sales, as guidance offered no upside surprise.

4. IBM dropped 5.4% premarket, adding to pressure on enterprise AI names.

5. Meta rose 1% on bullish Muse adoption signals, the lone bright spot among major AI earnings.

6. Rising oil prices above $112 and a French bond selloff deepened the risk-off move across global markets.

7. Analysts say expectations are so elevated that AI companies must “smash it out the park” to satisfy investors.