Technology stocks faced a sharp sell-off on Wall Street this week as investors grew increasingly concerned that the massive investments in artificial intelligence (AI) infrastructure may not translate into higher profits quickly enough to justify elevated valuations.Although earnings reports from major technology companies showed continued growth in cloud computing and AI-related businesses, investors focused on the mounting costs of building data centres, purchasing advanced chips and expanding computing infrastructure.The concerns triggered heavy selling in technology shares on Friday, extending losses across major US stock market indices.The Nasdaq 100 Index's October decline reached 6.7%, marking its worst monthly performance since March 2025, when markets were rattled by tariff-related uncertainty.Heavy AI investments raise concerns over cash flowsOne of the biggest concerns among investors is the growing gap between technology companies' capital expenditure and the cash generated by their businesses.Major cloud and technology companies, often referred to as hyperscalers, are spending billions of dollars on data centres, servers, networking equipment and other infrastructure required to support AI services.While demand for cloud computing remains strong, investors increasingly want evidence that these investments will translate into sustainable revenue growth, stronger operating margins and improved free cash flows.The latest earnings announcements from major technology companies failed to provide sufficient reassurance on these fronts, triggering a reassessment of valuations.Alphabet suffers historic single-day declineShares of Alphabet Inc., Google's parent company, plunged 13% on Thursday, marking their biggest single-day decline.The sell-off followed the company's earnings announcement, which revealed disappointing sales growth in its core search business and a second consecutive quarter of negative free cash flow.The development was particularly concerning because Alphabet had not previously reported two consecutive quarters of negative free cash flow as a publicly traded company.Alphabet spent more than $50 billion on infrastructure and other capital investments during the latest quarter.Amazon and Meta shares slide on spending concernsAmazon.com Inc. also came under pressure after reporting significantly higher negative free cash flow than analysts had expected.The deterioration was attributed largely to increased capital expenditure and slower growth in its e-commerce business, which recorded its weakest expansion in three years.Over the past year, Amazon spent approximately $42 billion more than the cash generated by its business on capital investments, primarily related to data centres and equipment supporting AI operations.Amazon shares declined 5.6% over Thursday and Friday, recording their worst two-session performance since July.Meta Platforms Inc. has also faced investor concerns after its October 21 results revealed a substantial increase in its capital expenditure plans for the year.