Amazon shares dropped 7 percent and Intel tumbled 25 percent in premarket trading on Friday after both companies delivered September-quarter results that fell short of expectations, pulling Nasdaq-100 futures down 2 percent and extending a bruising week for megacap technology stocks.
Amazon’s cash burn deepens
Amazon missed analyst estimates for both revenue and profit in the third quarter while holding to its 2026 capital expenditure target of $220 billion. The company also posted negative free cash flow for a second straight quarter, with the shortfall widening significantly from the prior period. The print echoed Alphabet’s report on Thursday, where the Google parent recorded its worst single-day decline in history, a 13 percent slide, after its own cash generation swung deeply negative. Microsoft, by contrast, bucked the trend, generating positive free cash flow in the September quarter and seeing its shares rise.
Intel warns on PC weakness
Intel’s guidance came in well below consensus, with management pointing to persistent softness in the personal computer market. The forecast dragged other semiconductor names lower in early U.S. trading, including Micron, Nvidia and Arm. European chip equipment giant ASML also saw sharp declines, underscoring the sector-wide anxiety.
Crowded positioning, not broken fundamentals
Matt Orton, chief market strategist at Raymond James, told CNBC on Friday that the selloff reflects a positioning squeeze rather than a fundamental breakdown. He described the moment as a prompt for investors to reconsider how crowded trades remain across the AI infrastructure space, even as the underlying demand drivers stay intact. Orton added he is comfortable with the temporary free cash flow deficits at the hyperscalers, viewing them as the cost of building out capacity for a multi-year investment cycle.
Year-to-date gains still intact
Despite the premarket slide, the Nasdaq Composite remained up more than 12 percent for the year as of Thursday’s close. The question now is whether this week’s cash flow shock marks a healthy reset for an overextended trade or the start of a deeper reassessment of the return profile on hundreds of billions in AI spending.