Amazon Sinks 7%, Intel Craters 25% as Tech Earnings Wreck the Tape

Amazon and Intel took a beating before the bell Friday, with Amazon down 7% and Intel down 25% in premarket trading after September quarter results landed wrong with investors. The damage dragged Nasdaq futures down 2%, closing out a brutal week for Big Tech earnings.

Amazon missed on both the top and bottom line. The company also posted negative free cash flow for a second straight quarter — and this one was much bigger than the last. It held its capital expenditure forecast at $220 billion.

Intel's 25% plunge was the sharper of the two, capping a rough stretch for the chipmaker as it tries to right the ship.

The real anxiety is AI spending. Investors are watching tech giants pour enormous sums into artificial intelligence infrastructure and asking a simple question: when does it pay off? Amazon's widening negative cash flow gave them another reason to worry.

Alphabet already showed how ugly that can get. Its shares closed 13% lower Thursday — the worst single-day drop in the company's history — after it too reported ballooning negative free cash flow. According to CNBC, the selloff set the tone for the rest of the week.

Microsoft offered the counterexample. Its shares rose after it stayed cash flow positive in the September quarter, showing that the market is rewarding discipline and punishing red ink right now.