Amazon, Intel slump after Alphabet miss drags down Nasdaq

A rally in technology stocks stalled on Thursday, October 29, after results from Alphabet ↗ 0.78% and Samsung Electronics renewed doubts about whether heavy spending on artificial intelligence will pay off. Chip shares in Asia fell, and Nasdaq 100 futures dropped during the Asian session, according to Investing.com. Investors then turned to Amazon Amazon.com, Inc. ↘ 0.35% and Intel ↗ 7.71%, which reported after the U.S. close. Both stocks also fell.finance.yahoo.com

Seoul leads regional losses

South Korea's Kospi fell back after jumping nearly 7% the day before. Samsung reported another quarter of record earnings on demand for memory chips, but it gave no plans for bigger shareholder returns and its shares fell, Reuters reported. Investors were also disappointed by chip-division profit that missed forecasts and an 800 billion won loss in the mobile business, Investing.com reported. Samsung said it would finalize its next shareholder-return policy in January. It also expects semiconductor capital spending of 76.8 trillion won this year, up 62% from 2025. SK Hynix ↗ 2.78% rose again after announcing a shareholder-return plan worth about $75 billion.reuters.com+1

Elsewhere, results were mixed. China's Shanghai Composite closed lower as chip stocks fell. Japan's Nikkei 225 ended higher, helped by Advantest after it raised its profit forecast, Barchart reported. Hong Kong's Hang Seng was little changed, while its tech sub-index fell.barchart.com

Alphabet's cash burn

Alphabet earned $2.12 per share on revenue of $127.58 billion, below analyst estimates. Search and advertising revenue fell short, even though cloud revenue roughly doubled, Investopedia reported. Capital spending reached $51.4 billion, pushing free cash flow to negative $9.1 billion, according to Barchart. "Their traditional revenue service of ad generation has been impacted by the very thing which is the AI boom," VanEck's Jamie Hannah told Reuters.investopedia.com+2

On Wall Street, Alphabet closed down 12.6%. The Nasdaq Composite fell 1.37%, while the S&P 500 ↗ 0.31% and Dow Jones Industrial Average each slipped about 0.3%, Reuters reported. Microsoft ↘ 0.99% had a different reaction to its own results. Its cash flow beat expectations, and its stock rose in early trading, Reuters reported.reuters.com+1

Amazon and Intel add to pressure

After the close, Amazon fell more than 6% in extended trading. It earned $1.89 per share on revenue of $201.94 billion, missing estimates, and kept its $220 billion capital spending plan for the year, CNBC reported. Intel fell about 17% after forecasting fourth-quarter revenue of $15 billion to $16 billion and adjusted earnings of 25 cents per share. Analysts had expected 43 cents per share on $17.1 billion in revenue, according to CNBC.cnbc.com

Interest rates add to the pressure. The Federal Reserve held rates steady on Wednesday, but two policymakers voted for a hike. Markets still put about an 80% chance on a December increase, Reuters reported. The Bank of Japan is set to announce its policy decision on Friday.reuters.com