
Tech earnings drag Nasdaq futures down 2% amid investor concerns over massive AI spending.
Amazon and Intel shares dropped in premarket trading after reporting disappointing September quarter numbers, dragging Nasdaq futures down 2% amid growing investor anxiety over massive AI spending and negative free cash flow.
AI-generated summary
Major tech companies have been heavily investing in artificial intelligence, raising investor concerns regarding returns on capital expenditure.
Amazon and Intel shares were down in premarket trading on Friday after they reported September quarter numbers that disappointed investors, dragging Nasdaq futures down 2% and capping off a week of rough tech earnings.
Amazon shares were down 7% in premarket trading, while Intel was down 25%.
Amazon reported a third-quarter miss on the top and bottom line while maintaining its capital expenditure forecast for 2026 of $220 billion this year. Amazon also reported negative free cash flow for the second consecutive quarter, much larger than the previous period.
Investors are nervous about the massive AI spending from the tech giants and whether that will pay off.
On Thursday, Alphabet shares closed 13% lower, its worst single-day drop in history after it too reported ballooning negative free cash flow.
Microsoft shares rose after it remained cash flow positive in the September quarter.

BP reported $8.5 billion in Q3 underlying replacement cost profit, beating analyst forecasts of $6.191 billion as volatile energy markets and high refining margins boosted earnings.

BP reported third-quarter underlying replacement cost profit of $8.5 billion, nearly quadrupling year-on-year and beating analyst forecasts due to volatile energy markets and high refining margins.

India's Ministry of Finance has raised its FY27 growth forecast to 7.3%, citing strong domestic indicators. Despite this, the government warns of inflationary pressures, currency volatility, and risks from the El Nino weather phenomenon and global instability.

Alphabet shares fell 13% after reporting negative free cash flow and missing search ad revenue targets. Microsoft shares remained flat as investors evaluated capital expenditures and AI investment returns in the latest quarterly earnings reports.

Non-tech firms, particularly in healthcare and banking, are offering higher salaries for software engineers than tech companies. This shift follows a wave of layoffs in the tech sector and an increased corporate focus on integrating AI technologies.

Alphabet shares fell 11% in premarket trading after reporting negative free cash flow, while Microsoft shares rose 4% as capital expenditures stayed below analyst projections. Investors are scrutinizing AI spending and returns for both tech giants.