In premarket trading on Friday, Amazon shares fell by 7% and Intel shares plummeted by 25% following their earnings reports for the September quarter, which failed to meet investor expectations. Amazon's results showed a miss on both revenue and earnings, alongside a forecast for capital expenditures of $220 billion for 2026.
Additionally, the company reported negative free cash flow for the second consecutive quarter, which was significantly larger than the previous quarter's figures. This has heightened investor anxiety regarding the substantial spending on artificial intelligence by major tech firms and the uncertainty of its future returns.
The negative sentiment in the tech sector was further exacerbated by Alphabet's 13% drop in share price, marking its worst single-day decline, attributed to similar concerns over negative cash flow. In contrast, Microsoft managed to maintain a positive cash flow during the same quarter, resulting in a rise in its stock price.
Overall, the disappointing earnings from these tech giants have contributed to a 2% decline in Nasdaq futures, indicating a challenging environment for the sector