Amazon and Intel missed on third-quarter earnings, reigniting fears among investors that the AI trade is about to slow.
ANGELA WEISS / AFP via Getty Images
Amazon and Intel earnings sparked a sell-off that cratered tech stocks on Friday.
Investors are applying much greater scrutiny to tech earnings, questioning capex and funding.
The Nasdaq 100 shed more than 3%, capping its worst month since 2025.
It was a Friday full of bruising losses for the tech trade .
The Nasdaq 100 shed more than 3% to end October with its worst monthly loss since March 2025. The tech-led index lost 6.7% in the week, losing over 7% for the month.
The losses on Friday were sparked by Amazon and Intel , which plunged after hours on Thursday as both tech giants disappointed investors with their third-quarter earnings reports and reignited fears that the AI trade is headed for a slowdown.
Amazon dropped as much as 7% before paring the deepest losses to end the session down 1.75%. The retail giant reported earnings per share and revenue that came in below expectations for the third quarter. The company also posted a negative cash flow of $7.6 billion for the second straight quarter, which it said was due to its growing AI spend. CEO Andy Jassy said the firm expected it would continue to “spend meaningfully more” into next year.
Meanwhile, Intel shares cratered 29%. The computer hardware maker beat on earnings and revenue, but issued weak guidance for the fourth quarter, forecasting a slowdown in the PC market that would stretch into at least the first half of 2027. Revenue in Intel’s client computing and physical AI business also dropped 5% year-over-year to $8.1 billion, missing estimates.
The firm maintained its capex guidance, but warned that it likely wouldn’t generate free cash flow in 2027, partly due to capex being “up strongly,” chief financial officer Dave Zinsner said on the call with investors.
Q3 earnings metric Amazon Intel
Earnings per share $1.89 vs. $1.96 expected $0.52 vs. $0.40 expected (adjusted)
Revenue $201.94B vs. $202.31B expected $16.51B vs. $16.50B expected
The dismal results, along with a grim earnings report from Alphabet on Wednesday that sent its stock cratering, have revived some of the market’s deepest fears about the trajectory of the AI trade.
Ivestors are ramping up scrutiny over the finances of major tech players, fearing that AI investments aren’t paying off. The worries are running in both directions: that Big Tech firms are spending too much on AI when the profit potential remains unclear, and that AI investment could soon start to slow, which could spark a series of downstream consequences that will crush suppliers in the industry.
“The AI trade has clearly run into a wall of trouble. We are finally seeing the investor base take out their pencils and draw a dividing line between those who are spending rationally on AI and those who are not,” top economist David Rosenberg wrote in a note Thursday morning.
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Here’s where US indexes stood at the 4 p.m. ET closing bell on Friday:
S&P 500 : 7,559.96, down 2.08%
Dow Jones Industrial Average : 51,678.73, down 1.27% (-663.83 points)
Nasdaq 100 : 28,255.72, down 3.9%
Other chip companies were down sharply, and Neoclouds, one area in particular investors believe would struggle if industry-wide capex were to slow, continued to take it on the chin as investors sought shelter from the rout. SanDisk , notably, was caught amid the broader panic despite its blowout third-quarter earnings report, with the memory company posting 378% revenue growth.
The iShares Semiconductor ETF dropped 8% and remains in a bear market, having fallen 27% from its earlier peak. The Roundhill Neocloud ETF plunged another 8% Friday morning, putting the fund down 42% from its all-time high.
Meanwhile, investors fled to safe havens as tech swooned. The 10-year Treasury yield dropped 6 basis points to 4.92%.
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Here were the most notable moves in the tech sector:
Company Ticker Today’s move
Intel INTC -29%
Sandisk SNDK -15.32%
AMD AMD -10.86%
SK Hynix (US-listed ADRs) SKHY -9.67%
Amazon AMZN -1.75%
Micron MU -5.5%
Broadcom AVGO -6.2%
Nvidia NVDA -4.15%
Samsung Electronics SSNLF -3%
Sentiment on Wall Street was mixed Friday morning as strategists surveyed the damage over the last month as tech stocks have taken a beating. The Nasdaq 100 is on track to end October in the red, shedding more than 6%.
JPMorgan market intelligence strategists said the rotation away from AI was likely to continue on Friday, thanks to “renewed fears over AI monetization.”
“The AI trade is down, but not out. This is not the first tech and AI correction, and it won’t be the last. We are still in the very early stages of AI development, and pullbacks are par for the course,” Paul Stanley, a managing director at Arca, wrote in a note.
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