Amazon falls 2%, Intel dives 29%, as tech stocks sell off in post-earnings rout
Investors are nervous about the massive AI spending from the tech giants and whether that will pay off.
TL;DR
- Amazon and Intel shares fell sharply following their September quarter earnings reports.
- The Nasdaq Composite dropped more than 2% as tech stocks underperformed.
- Amazon reported a miss on revenue and earnings, along with negative free cash flow for the second consecutive quarter.
- Intel provided weaker-than-expected guidance, citing a soft PC market.
- Investor nervousness stems from massive AI spending by tech giants and uncertainty about its payoff.
- Alphabet shares experienced their largest single-day drop in history after reporting increased negative free cash flow.
- Microsoft shares rose due to remaining cash flow positive in the quarter.
- Analysts suggest that while the current situation is challenging, the long-term fundamentals, particularly for AI capex beneficiaries, remain strong.