Amazon kept its 2026 capital spending plan at $220B and told investors to expect more in 2027, while Intel warned it would burn cash this year.
Both reports landed late Thursday and set off a broad tech selloff on Friday, Oct. 30.
Amazon reported negative free cash flow for the second straight quarter, with the outflow widening from the prior period. Growth in its core online shopping business slowed as AI spending ran faster than expected.
"We still expect 2026 cash [capital expenditures] of approximately $220 billion..."
Andy Jassy, Amazon
His team had already set spending to double from 2025 levels.
Intel's quarter went backwards
Intel guided to fourth-quarter revenue of $15B to $16B and adjusted earnings per share of 25 cents. Analysts had modeled $17.1B and 43 cents, per LSEG.
An explosion at an Intel fab in Israel killed two workers earlier this month and forced an extended shutdown. The incident could cost roughly $600M in lost revenue over two quarters, finance chief David Zinsner said.
The PC market is the other drag. Global PC shipments fell 4% in the second quarter from a year earlier, according to Counterpoint Research, as memory costs soared.
Zinsner expects the PC slowdown continuing at least through the first half of next year. CEO Lip-Bu Tan said Intel is making progress on its coming 14A chips and expects to name foundry customers within two quarters.
Investors are asking when the buildout pays
The Nasdaq-100 was on course to erase over $1T of market value in a single session, with Amazon and Intel accounting for roughly $200B of the combined damage. The index is set to shed more than $2T this month.
Bar chart. USD Trillions. Nasdaq-100 One-Day Risk: Market Value ($T) $1. October Nasdaq-100 Losses: Market Value ($T) $2. AMZN + INTC One-Day Risk: Market Value ($T) $0.2.
Money moved to defensive corners. Consumer staples rose 1.6% and healthcare gained 0.7%, with healthcare hitting a record high.
Earnings season itself has been strong. Of the 299 S&P 500 companies that had reported, 82% beat consensus, and analysts expect third-quarter earnings growth of 31.6% year-on-year, per LSEG.
The worry is about when the spending pays off.
"A lot of them kind of got ahead of themselves," said Themis Trading's co-manager of trading, Joe Saluzzi.
There's a knock-on effect in bonds. Tech firms borrowing for data centers have crowded into debt markets, helping push yields up in recent months, and the 10-year Treasury yield slipped to around 4.89% on Friday from just under 5% a day earlier.
Next year's capex guidance from the rest of Big Tech now arrives with a much shorter leash.
