Tech stocks slid on AI spending worries, and phones cost more

Warm-up

How long have you had your current phone?

• Under 1 year
• 1 to 2 years
• 3 years or more
• No idea

Top story

U.S. stocks fell on Thursday, led by tech. The Nasdaq dropped 2.6%, its biggest one-day fall since early June, and the S&P 500 lost 1.2%. The Dow barely moved. Reuters reported that Meta's stock fell about 7% after its report showed its spending on artificial intelligence (AI) pushed its free cash flow negative. Chip stocks fell too, including Nvidia, down about 4%. Investors worried that AI costs are getting too big. Today at 9:45am ET, S&P Global releases its flash PMI, a survey of how busy U.S. businesses are.

Why should a teenager care? AI companies are buying huge amounts of memory chips, the parts that store data in phones and computers. Reports tie that demand to Samsung raising U.S. prices on its Galaxy S26 phones by $100 on most models on October 1. The base S26 now starts at $999.99. Samsung hasn't explained the U.S. increase itself, but this is how a company's spending can reach your wallet.

Why it matters to you: Your next phone, laptop or game console is built from chips that AI companies also want. When many buyers compete for the same parts, prices can rise for everyone, including you.

Your money

Cost per month beats the price tag

A big price tag is easier to understand when you spread it over time. The cost per month of something is its price divided by the number of months you use it. It turns "$900" into a number you can compare with a $15 subscription or a paycheck.

Take a $900 phone. If you replace it after 24 months, it costs $37.50 a month. If you keep it 36 months, it costs $25 a month. Same phone, same price, but a third year of use cuts the monthly cost. Samsung's $100 price hike works out to about $4.17 a month over two years.

Longer use isn't always better. A cracked screen or a dead battery has a cost too. But before you upgrade, ask what your current phone costs per month and what the new one would. A good case can be cheaper than a new phone.

Guess the number

You keep a $900 phone for 3 years instead of 2. How much less does it cost per month?

Stock of the day

Spotify SPOT +11.1%

Spotify's stock rose about 11% on Thursday while the Nasdaq fell 2.6%. The music app reported 306 million paying subscribers, up 9% from a year ago, and 788 million monthly users. Revenue rose 16% to about 5 billion euros. Spotify's earnings per share came in below analysts' forecasts, but its outlook for the fourth quarter was above what analysts expected. That outlook is called guidance: a company's own forecast of how it will do next. Reports said investors liked the subscriber growth and strong profit margins.

Pop quiz

Class discussion

Would you rather buy a cheaper phone every two years or pay more for one that lasts four? What would make you switch?

Last bell

Spotify now has 788 million monthly users

That is more than twice the population of the United States, which is about 340 million people. Spotify said its monthly users grew 11% from a year ago, and about 306 million of them pay for Premium. The rest use the free, ad-supported version.

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