Amazon and Intel slide as AI spending fears shake tech shares and drag Nasdaq futures lower
Amazon fell 7.2% and Intel fell 25% in premarket trading on Friday after results that exposed the soaring cash cost of the AI buildout, sending Nasdaq 100 futures down 2.16%.
Nasdaq futures tumbled on Friday as Amazon and Intel shares slid sharply after their latest results, deepening investor unease about the enormous cost of building artificial intelligence infrastructure. Amazon shares were down 7.2 per cent in premarket trading and Intel shares were down 25 per cent, while Nasdaq 100 e-mini futures fell 640 points, or 2.16 per cent, at 04:04 a.m. Eastern Time. S&P 500 e-minis were down 1 per cent and Dow e-minis were down 0.05 per cent at the same point, and Reuters reported that Amazon and Intel together stood to lose about $300 billion in market value if the early losses held.
Amazon disappointed investors on two fronts at once. Third-quarter revenue rose 12 per cent from a year earlier to $201.94 billion, but that was below the $202.31 billion analysts had expected, and earnings per share of $1.89 also missed the $1.96 consensus. The shares had already fallen during Thursday’s regular session before dropping further after the results were released, extending a difficult week for large technology stocks.
The deeper concern was cash. Amazon reported negative free cash flow of $42.4 billion over the 12 months to the end of September, compared with positive free cash flow of $14.8 billion in the same period a year earlier. The company attributed the swing mainly to a $94.8 billion year-on-year increase in net purchases of property and equipment, driven principally by artificial intelligence investment, as it expands data centres and related hardware.
Amazon is maintaining its forecast of about $220 billion in cash capital expenditure for 2026, and chief executive Andy Jassy told investors on the earnings call that spending in 2027 would be meaningfully higher, without giving a figure. For investors already worried about returns on the AI buildout, that promise of still heavier spending next year was part of the problem rather than reassurance.
The cloud business itself performed strongly. Amazon Web Services revenue rose 39.3 per cent to $46 billion, its fastest growth in nearly five years, and the division has now recorded six consecutive quarters of accelerating growth. Yet even that strength was not enough to offset the market’s focus on how much cash the expansion is consuming, and on softer parts of the wider business, including slower advertising growth.
Intel’s selloff was steeper still, despite a headline quarter that beat profit expectations. Third-quarter revenue rose 21 per cent to $16.51 billion, in line with estimates, and non-GAAP earnings of 52 cents a share beat the 41-cent expectation. Its Data Center and AI unit surged 78 per cent to $7.3 billion, a sign that demand for AI-related chips remains powerful.
The trouble lay in the outlook and in the older PC business. Intel forecast fourth-quarter revenue of $15 billion to $16 billion, whose midpoint of $15.5 billion sits about 9.2 per cent below the $17.07 billion consensus cited by Reuters. Client computing revenue, from PC chips, fell 5 per cent to $8.1 billion, below the $8.98 billion expected, and the company warned it would burn cash this year because of a weak PC market, manufacturing bottlenecks and heavy spending to expand production.
Intel chief financial officer David Zinsner said on the earnings call that spending on growth and manufacturing changes would probably leave the company without positive free cash flow in 2027. That warning, coming alongside Amazon’s cash outflow, reinforced the sense that even companies reporting growth are paying a very high price for it, and that the bill is arriving sooner than many investors had assumed.
The selloff did not stop in the United States. Alphabet, Google’s parent, had already fallen 12.6 per cent in the previous session, wiping out about $500 billion in market value after its own results showed heavy AI spending turning cash flow negative. In Asia on Friday, Japan’s Nikkei fell about 3 per cent and South Korea’s Kospi fell about 5 per cent, while China’s blue-chip CSI300 headed for its largest monthly fall in a decade.
Broader markets reflected the same flight to safety, with benchmark 10-year US Treasury yields falling to about 4.91 per cent and the dollar softening, even as oil stayed supported by tensions around Iran. In the European session, West Texas Intermediate crude rose more than 2 per cent to about $104.25 a barrel, while gold slipped about 1.2 per cent to about $3,971 an ounce as leveraged investors sold positions to cover losses elsewhere.
Analysts said the shift in mood was less about whether the AI buildout can be financed and more about whether shareholders will earn an adequate return on the enormous capital being deployed. Pepperstone analyst Chris Weston was quoted making that distinction as markets weighed years of data-centre spending against profits that have yet to match the scale of the investment.
What happens next will depend heavily on the US session and on the next round of results, including energy giants Chevron and ExxonMobil reporting before the bell. If technology shares stabilise, the selloff may prove to be another sharp correction inside a longer AI investment cycle; if spending guidance keeps rising without clearer returns, further de-risking is possible, and the Nasdaq remains on course for a monthly fall after two consecutive monthly gains, even as the S&P 500 and the Dow head for positive months. Figures checked at about 5:22 pm PKT on Friday, 30 October 2026.
This post is market news information only, not financial advice.
