In early Friday trading, Amazon stock dropped about seven percent while Intel tumbled roughly twenty-five percent after each company released third-quarter results that fell short of expectations. The weakness dragged Nasdaq futures down two percent, extending a week marked by rough earnings from major technology firms.
Amazon disclosed a miss on both revenue and earnings for the quarter and reiterated its 2026 capital-expenditure target of $220 billion. The retailer also posted negative free cash flow for a second straight quarter, a decline that was noticeably larger than the prior period’s shortfall.
Intel’s earnings also disappointed investors, prompting the steep pre-market slide. The chipmaker’s results added to the broader narrative of strained profitability in the semiconductor sector as companies grapple with elevated spending on artificial-intelligence initiatives.
Other chip makers felt the ripple effect. Shares of Micron, Nvidia and Arm fell in U.S. pre-market trading, while European semiconductor leaders such as ASML experienced sharp price drops, underscoring the pervasive market anxiety.
Investor unease is intensifying around the massive AI-related capital outlays by tech giants and whether those investments will generate returns. Alphabet’s stock closed thirteen percent lower on Thursday, marking its worst single-day decline ever after reporting sharply rising negative free cash flow.
Nasdaq-100 futures remained two percent lower in early trade, raising the possibility that the tech-heavy index could slip into negative territory for the week. Despite the recent setbacks, the broader Nasdaq Composite index is still up more than twelve percent year-to-date as of Thursday’s close.
Matt Orton, chief market strategist at Raymond James, told CNBC’s “Squawk Box Europe” that the current dip does not constitute a reckoning but suggests investors should reconsider crowded positions even though fundamentals stay solid, especially for firms benefiting from AI capex. He added that he is generally comfortable with temporary negative free cash flow in the sector.