Tech stocks across the board fell sharply in overnight trading ahead of Friday.
- Intel shares plunged 23% in overnight trading ahead of Friday after the chipmaker forecast December quarter sales and profit below expectations.
- Alphabet’s weak revenue in core search advertising and a surge in AI-related cash burn overshadowed a doubling of its cloud unit sales.
- Amazon reported massive cash burn, while signaling that capital expenditures next year would top an already huge 2026 target.
The market’s mood toward tech stocks has soured as the week closes out, weighed down by growing concerns about the cost of the AI boom and by results from Amazon and Intel showing spending continuing to rise while sales lagged.
A day earlier, Google parent Alphabet, Inc. disappointed investors with weak search and ad revenue, which it blamed on currency moves, FIFA World Cup timing, and a pullback by Asia-Pacific advertisers hit by the EU’s de minimis changes. Investors will watch Friday’s move closely to see which tech stocks recover and which end in the red.
Here are the key stories from the past week through Thursday:
Intel Issues Weak Forecast, Flags Continued PC Market Weakness
Intel shares plunged 23% in overnight trading ahead of Friday after the chipmaker forecast December quarter sales and profit below expectations and flagged manufacturing bottlenecks and heavy spending to expand production. Its view that the PC market (Intel sells CPUs that power computers) would shrink pressured HP Inc and Dell Technologies shares.
Earlier in the week, Bloomberg reported, citing sources, that the chipmaker was in talks to buy quantum computing software company Classiq for about $2.3 billion.
Alphabet Results Show Search, Ad Weakness
Alphabet reported disappointing Q3 results driven by weak revenue in core search advertising and a surge in AI-related cash burn, which overshadowed a doubling of its cloud unit sales.
“Google Search & other” revenue slowed, growing at 12% to $63.3 billion, compared to the 17% growth pace in the preceding second quarter. Alphabet spent $51.36 billion in capital expenditure and said its 2027 figure would be higher than this year’s.
Amazon’s Rising Surging AI CapEx Triggers Anxiety
Amazon on Thursday reported a massive third-quarter cash burn, sending shares sharply lower, while signaling that capital expenditures next year would top an already huge 2026 target.
Amazon spent $77.3 billion last quarter, a 43% increase and $20 billion higher than analysts’ projection. It reported a free cash outflow of $42.4 billion and shares tumbled 7% in overnight trading.
Microsoft’s Azure Growth Power Q1 Beat
Microsoft Corp was the only Big Tech company whose results over the past week supported the market. The Windows-maker reported better-than-expected quarterly results, driven by 48% growth in its Azure cloud business.
Revenue rose 19% to $92.28 billion in its fiscal first quarter, above expectations of $90.69 billion. Unlike hyperscaler peers Alphabet and Amazon, Microsoft posted positive free cash flow.
How Did Tech Stocks Move This Week?
Lumentum Holdings (LITE) and Synopsys (SNPS) were the top tech gainers in the Nasdaq-100 in the week through Thursday, rising 22.2% and 16% respectively.
The Invesco QQQ Trust Series 1 (QQQ) gained 1.6%, after two consecutive weeks of ending in the red. Fortinet (FTNT) dropped 20%, emerging as the biggest tech loser in the index.
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