Nasdaq hits near three-month low as Amazon, Intel deepen AI capex concerns
SPY•The Nasdaq fell 2.21% to its lowest level in nearly three months as Amazon’s spending plans and Intel’s cash-burn warning intensified concerns about AI infrastructure costs and returns. The Dow fell 0.39% and the S&P 500 dropped 1.22%.
1. Technology shares fall
The Nasdaq tumbled on Friday after Amazon’s aggressive AI spending plan and Intel’s cash-burn warning heightened concerns about the cost of AI infrastructure and the timeline for returns. Amazon slipped 2% after reporting a sharp third-quarter cash outflow and signaling capital expenditure would rise again next year.
2. Intel warns of cash burn
Intel fell more than 30% after warning it would burn cash this year, citing a weak PC market, manufacturing hurdles and heavy spending to expand production. Nvidia fell 3% and AMD slid 9.3%, while the broader chip index lost 5.7%. Amazon and Intel were set to lose about $200 billion in combined market value if their declines held.
3. Broader market moves
At 9:53 a.m. ET, the Dow was down 0.39%, the S&P 500 1.22% and the Nasdaq Composite 2.21%. Defensive consumer staples and healthcare indexes rose 1.9% and 1.7%, respectively. The article also cited expectations of more than 50 basis points in Federal Reserve rate increases by mid-2027, which could make debt-funded AI spending harder to justify.
