Fears regarding competition in AI trigger corrections in tech; investors are cautiously watching Alphabet's spending.

The technology sector has suffered a massive sell-off, with the S&P 500 Technology index falling by 2.7% and Nasdaq by 1.5%. The trigger was Anthropic's announcement regarding an AI agent that will automate various tasks, generating concerns about competition. The communications services sector, including Meta and Alphabet, decreased by nearly 1%. Alphabet reported a solid quarter, with revenues increasing by 18% and strong performance in advertising and Google Cloud, which grew by 48%. However, the estimated capital expenditures for 2026 are alarming, between $175 and $185 billion, exceeding market expectations. Management emphasized commitments in AI but also mentioned supply constraints. Investors are wondering if these expenditures will generate profitable growth, considering the uncertainties in the sector.