Nasdaq set for sharp drop as Amazon, Intel amplify AI spending worries
QQQ•The Nasdaq was set for a 2.6% drop at Friday's open as Amazon's planned increase in capital spending and Intel's cash-burn warning heightened concerns about AI investment costs. Amazon shares fell 6.5% and Intel slid more than 25% in premarket trading; together, their declines threatened to erase about $300 billion in market value.
1. AI spending fuels concerns
The tech-heavy Nasdaq was poised for steep losses as investors weighed Amazon's aggressive AI spending plan and Intel's warning that it would burn cash this year. Amazon reported a sharp third-quarter cash outflow and signaled another increase in capital expenditure next year, while Intel cited weak PC demand, manufacturing bottlenecks and heavy production expansion spending.
2. Technology shares fall
At 8:15 a.m. ET, Nasdaq 100 futures were down 2.6%, S&P 500 futures 1.12% and Dow futures 0.08%. Amazon and Intel were set to lose about $300 billion in combined market value if their premarket declines held, while Alphabet fell 1% after a record selloff in the previous session. Nvidia was down 3.2%, AMD 8.3%, Dell 11.8% and HP 9.5%.
3. Broader market context
The Nasdaq was on track to break a two-month winning streak in October, despite remaining poised for a weekly gain. The S&P 500 and Dow were still on course for monthly gains. Energy companies Chevron and Exxon Mobil rose after reporting third-quarter profits above estimates.
