Nasdaq tumbles as Amazon, Intel deepen AI spending fears

The Nasdaq Composite opened at its lowest level in more than two months on Friday, October 30. Amazon's Amazon.com, Inc. ↘ 1.41% heavy AI spending plans and Intel's ↘ 28.58% weak outlook added to investor worries about the cost of building AI infrastructure and how long it will take to pay off, Reuters reported. The tech-heavy index fell more than 2% at the open, and the S&P 500 ↘ 1.77% lost more than 1%. The Dow Jones Industrial Average edged higher. Before the bell, the Nasdaq-100 was headed for a loss of more than $1 trillion in market value, according to NBC News.reuters.com+1

Cash burn takes center stage

Amazon's third-quarter revenue and earnings both missed Wall Street estimates, and the company kept its 2026 capital spending forecast at $220 billion, CNBC reported. Free cash flow over the trailing 12 months came to negative $42.4 billion, compared with positive $14.8 billion a year earlier, TechCrunch noted. Quarterly capital spending reached $77.3 billion, well above the $58.7 billion analysts had expected, according to CNBC. On the earnings call, CEO Andy Jassy said Amazon expects to "spend meaningfully more in 2027," NBC News reported.nbcnews.com+2

Intel shares fell nearly 30% after the chipmaker gave fourth-quarter guidance below expectations, pointing to soft PC demand, CNBC reported. "We face near-term challenges, including manufacturing, supply shortage, the unprecedented memory crunch and the resulting softness in PC demand," CEO Lip-Bu Tan told investors, according to NBC News. The Philadelphia Semiconductor Index PHLX Semiconductor Index ↘ 7.18% dropped sharply in premarket trading. Other chipmakers fell too, including Nvidia ↘ 4.22%, Micron ↘ 5.30% and ASML ↘ 6.55%, CNBC reported.cnbc.com+1

A bruising week for Big Tech

The selloff came a day after Alphabet ↘ 1.45% closed 13% lower on Thursday, its worst single-day drop on record, after it also reported growing negative free cash flow, according to CNBC. The drop wiped about half a trillion dollars off its market value, CNN reported. Microsoft ↘ 1.55% went the other way. Its shares rose after it stayed cash-flow positive for the quarter.cnn.com+1

Investors moved into government bonds. The 10-year Treasury yield fell from just under 5% on Thursday to around 4.89%, NBC News reported.nbcnews.com

Strategists urge perspective

Even after the recent losses, the Nasdaq was still up more than 12% for the year as of Thursday's close, CNBC noted. "I don't think this is a moment of reckoning," Raymond James strategist Matt Orton told CNBC. He said the fundamentals "by and large still remain in place."cnbc.com

Paul Stanley, a managing director at Arca, said in a note that "the AI trade is down, but not out," according to CNN. "This is not the first tech and AI correction, and it won't be the last."cnn.com