By Andrew Moran

The tech-heavy Nasdaq Composite Index fell more than 2 percent as disappointing results from Amazon and weak guidance from Intel weighed on sentiment toward artificial intelligence-related spending.

In its third-quarter earnings report, Amazon posted negative free cash flow for the second straight quarter and maintained its 2026 capital expenditure forecast of $220 billion.

Amazon reported a $42.4 billion outflow for the trailing 12-month period, up from $7.6 billion in the previous quarter.

Third-quarter capex exceeded $77 billion—far above market expectations of $58.7 billion—more than double its spending a year ago.

The online retail giant also fell short of Wall Street’s estimates on earnings per share and revenue, coming in at $1.89 and $201.94 billion, respectively.

The company’s spending spree is not slowing down heading into the new year.

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CEO Andy Jassy said on a call with investors that Amazon will “spend meaningfully more in 2027,” adding that it has a “clear line of sight to attractive financial returns.”

“We believe that Amazon Web Services can grow north of 40 percent in each of 2027 and 2028 and be a trillion-dollar-revenue business in the next five to 10 years,” Jassy told analysts.

Amazon shares fell about 7 percent before the opening bell, but pared their losses as the session went on.

With cash flows coming under pressure, companies involved in the AI infrastructure buildout are turning to debt and equity issuance to fund these ambitious endeavors.

Meta Platforms recently announced it will offer up to $95 billion in stock to cover some of its AI-related capex.

Alphabet, Amazon, Meta, and Microsoft have spent more than $200 billion on capital investment in the third quarter, bringing the year-to-date bill to more than $500 billion, says Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“The AI race is getting very, very expensive,” she said in an emailed note to The Epoch Times.

Intel Shares Sink

Chipmaker Intel, meanwhile, beat analysts’ expectations but posted weaker-than-expected guidance.

Revenue climbed 21 percent year over year to $16.51 billion, and earnings per share came in at 52 cents.

Looking ahead, Intel forecasts adjusted earnings per share of 25 cents on revenue between $15 billion and $16 billion in the current quarter.

Market watchers were projecting revenue of $17.1 billion and earnings per share of 43 cents.

Weak fourth-quarter estimates stemmed from softness in the global PC market.

“We see the PC slowdown continuing at least through the first half of next year,” Intel Chief Financial Officer David Zinsner said in a statement. “We will continue making disciplined investments in capacity and working capital to increase supply and support future growth.”

As for spending, Intel said it plans to continue investing in manufacturing capacity and supply expansion.

Despite short-term challenges impacting the global PC industry, Intel anticipates long-term “robust demand” for its chips and all of its computing platforms.

This rosy outlook was not enough for investors as the stock cratered about 25 percent in premarket trading on Oct. 30.

The weak outlook for the worldwide PC market should not be surprising, says Hendi Susanto, portfolio manager at Gabelli Funds.

“High memory prices and tight supply are here to stay, at least through the first half of 2027, since new DRAM [Dynamic Random-Access Memory] capacity won’t come online until the second half of 2027 at the earliest,” Susanto said in a note emailed to The Epoch Times.

‘No Tolerance’

The leading benchmark indexes were in the red, with the Nasdaq falling more than 2 percent. The broad-market S&P 500 slipped around 1 percent, while the blue-chip Dow Jones Industrial Average was little changed.

Despite the latest wave of volatility, all three major indexes are up this year.

Earnings season has been solid so far, but traders are watching for misses.

“The market has no tolerance now for misses on top/bottom line guidance, regardless of the reason,” Bob Lang, founder and chief strategist of Explosive Options, told The Epoch Times in an emailed note.

The tech-led selloff forced traders to seek shelter in U.S. Treasury bonds.

Yields were in the red across the board, with the benchmark 10-year down to around 4.93 percent in early trading.

Since reaching multi-year highs earlier this month, short- and long-dated government bonds have decelerated, even as the Federal Reserve signals interest rate hikes ahead.