Amazon, Intel shares fall after earnings amid AI spending concerns

Amazon and Intel shares had been down in premarket buying and selling on Friday after they reported September quarter numbers that dissatisfied traders, dragging Nasdaq futures down 2% and capping off every week of tough tech earnings.

Amazon shares had been down 7% in premarket buying and selling, whereas Intel was down 25%.

Amazon reported a third-quarter miss on the top and bottom line whereas sustaining its capital expenditure forecast for 2026 of $220 billion this 12 months. Amazon additionally reported adverse free money move for the second consecutive quarter, a lot bigger than the earlier interval.

Intel issued weaker-than-expected guidance, citing ongoing softness within the PC market.

Chip shares together with Micron, Nvidia and Arm had been decrease in premarket commerce within the U.S., whereas main European semiconductor names, together with ASML, noticed sharp declines.

Traders are nervous concerning the huge AI spending from the tech giants and whether or not that can repay.

On Thursday, Alphabet shares closed 13% decrease, its worst single-day drop in history after it too reported ballooning negative free cash flow.

Microsoft shares rose after it remained cash flow positive in the September quarter.

Nasdaq-100 futures had been down 2% in early buying and selling as tech shares remained underneath strain, which might put the tech-heavy index into adverse territory this week. Even with the current fall, the Nasdaq Composite index is up greater than 12% year-to-date as of Thursday’s shut.

“I do not suppose it is a second of reckoning however I feel it is a second the place traders ought to take an extended considered how positioning throughout the area nonetheless stays crowded though the basics are robust,” Matt Orton, chief market strategist at Raymond James, informed CNBC’s “Squawk Field Europe” on Friday.

“Whereas the right here and now will be painful … the very fact of the matter is the basics by and huge nonetheless stay in place, particularly throughout the AI capex beneficiary a part of the market.”

Orton mentioned he’s “typically okay” with these firms turning free money move adverse because it’s for a “non permanent interval.”