Nasdaq 100 Futures Dip On Weak Intel, Amazon Earnings With Bloated Capex Worries Weighing On Sentiment — AMZN, INTC, SBUX, PLTR, ASTS In Focus
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The S&P 500 ended Thursday 0.3% lower, the Nasdaq 100 fell 1.4%, and the Dow Jones Industrial Average eased 0.3%.
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Amazon spent upwards of $77 billion on property and equipment over the quarter ending September.
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Intel reported third-quarter revenue of $16.5 billion, up 21% year-over-year.
U.S. stock indices ended lower on Thursday and extended declines after-hours as bloated capital expenditures from Amazon fanned investor fears that the AI capex cycle might have gotten ahead of itself.
The S&P 500 ended Thursday 0.3% lower, the Nasdaq 100 fell 1.4%, and the Dow Jones Industrial Average eased 0.3%. The Russell 2000, which tracks small-cap stocks, added 1%.
Meanwhile, Nasdaq-100 futures lost 1.5%, while futures tied to the S&P 500 slid 0.7%. Dow futures fell 0.1%.
The SPDR S&P 500 ETF (SPY) fell 0.4%, and the SPDR Dow Jones Industrial Average ETF (DIA) slipped 0.4%. Meanwhile, the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) ended 1.4% lower on Thursday.
Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF dropped about 1% each on Thursday amid weakness in AMD, Micron Tech (MU) and Broadcom (AVGO). The broader Vanguard Information Technology ETF (VGT) fell 1.1%.
Retail sentiment on Stocktwits for SPY improved to ‘bullish’ from ‘neutral’, while it remained in ‘bearish’ territory for DIA and QQQ.
US Market Drivers
|
Index |
Move |
Close |
|
Dow Jones Industrial Average |
0.3% |
52,342.56 |
|
S&P 500 |
0.3% |
7,720.39 |
|
Nasdaq 100 |
-1.4% |
29,402.51 |
Amazon.com Inc. (AMZN) share price dropped about 7% after hours after the e-commerce giant reported third-quarter capital expenditures that far exceeded Wall Street projections, underscoring investor anxiety that the AI buildout might not translate into sufficient revenue.
The company stated that it spent upwards of $77 billion on property and equipment over the quarter ending September, primarily channeled into constructing new data centers and expanding its computing capabilities. This aggressive expansion resulted in a free cash outflow of $42.4 billion. Total revenue for the period climbed 12% to reach $201.9 billion.
Meanwhile, Intel Inc. (INTC) share price tumbled about 17% after-hours. The company forecast weaker-than-expected fourth-quarter revenue and earnings amid a slump in personal computer (PC) sales and supply bottlenecks.
Investors have been growing increasingly jittery around justifying bloated capital expenditure plans of hyperscalers and large tech firms, with doubts growing that these expenses might not convert into substantial revenue.
