Nasdaq-100 futures fall as Amazon and Intel swoon after earnings: Live updates

Nasdaq-100 futures fell 1.3% and S&P 500 futures dropped 0.6% Thursday evening after Amazon and Intel shares slid following quarterly results. Amazon fell 5% after missing Q3 earnings and revenue expectations, reporting negative free cash flow of $42.4 billion and maintaining its 2026 capex forecast at $220 billion; Intel dropped 20% after issuing a weak current-quarter outlook and reporting a 5% year-over-year decline in client computing and physical AI revenue to $8.1 billion. The weakness followed Alphabet's 12% regular-session decline after its Q3 earnings and revenue miss, intensifying scrutiny of AI investment costs.

Analysis

The important shift is from “AI demand” to scrutiny of who earns an adequate return on the build-out. If large buyers sustain heavy investment while free cash flow remains weak, investors may discount the next dollar of infrastructure spending rather than reward it. That can pressure semiconductor and memory suppliers through lower expected growth multiples before orders actually fall; conversely, a pause in spending could relieve buyer cash-flow concerns while creating a sharp near-term demand air pocket for suppliers. These are conditional mechanisms, not evidence that orders have already been cut.

Separate the signals: Intel’s PC weakness may be a company/endpoint-cycle issue, not proof that hyperscaler AI demand is rolling over. Amazon and Alphabet warrant closer scrutiny of cash conversion and whether investment is translating into durable revenue, but one quarter does not establish a structural deterioration. The broad risk is multiple compression across crowded AI exposures, with cross-asset spillover if investors reduce tech risk; the Dow’s relative resilience is not itself confirmation of rotation.

Near term, gap-driven volatility and month-end positioning can amplify moves, so chasing a first-session decline has poor asymmetry. Over 1–3 months, the key catalyst is whether subsequent guidance or reported cash flows validate a lower return-on-investment narrative. Over 6–18 months, sustained weak cash conversion alongside continued elevated investment would raise the risk of capex rationalization and supplier earnings revisions. The contrarian case is that spending is being mistaken for waste: if monetization and cash generation improve, the current de-rating could reverse quickly.

Key Decisions for Investors

• Avoid adding to unhedged, concentrated AI-infrastructure exposure before price discovery. For a tactical bearish expression, consider a defined-risk SOXX put spread after the opening volatility settles; keep size modest and exit if subsequent company guidance and cash-flow reporting stabilize. The thesis is falsified by sustained improvement in hyperscaler cash conversion without evidence of weaker supplier demand.
• Prefer relative underweight to SOXX and DRAM versus a broad-market benchmark over an outright short of the Nasdaq: this targets valuation and capex sensitivity while limiting exposure to a general rebound. Reassess over the next 1–3 months against supplier order commentary and hyperscaler investment plans; do not assume the current drawdown means orders have already rolled over.
• Keep Intel distinct from the hyperscaler capex thesis. Treat its PC outlook as a company-specific watch item; a further deterioration in client-computing revenue or guidance would support continued caution, while stabilization would weaken the case for extrapolating endpoint weakness across AI infrastructure.
• Before adding risk, verify the next reported free-cash-flow trajectory and management commentary on investment returns at Amazon and Alphabet, plus semiconductor and memory demand indicators. If cash conversion improves while planned investment is maintained, reduce bearish exposure: that would undermine the central de-rating thesis.