Amazon fell 7% and Intel 25% before the market opened Friday as investors worry that huge AI spending by tech giants may not pay off.
Amazon and Intel shares dropped sharply before the market opened on Friday, after both reported quarterly results that disappointed investors. Amazon was down 7% and Intel was down 25% in premarket trading, the early session before regular hours. Nasdaq futures, which point to where the tech-heavy index may open, were down 2%.
Amazon missed expectations on both sales and profit for the quarter. It also kept its 2026 spending plan at $220 billion. On top of that, it reported negative free cash flow for the second quarter in a row, and the gap was much larger than before. Free cash flow is the cash left after a company pays its bills and its big investments.
Alphabet, Google's parent company, closed 13% lower on Thursday, its worst one-day drop ever, after it also reported growing negative free cash flow. Microsoft shares rose because it stayed cash flow positive. The worry across the group is whether the massive AI spending will pay off.
Premarket moves can change once regular trading begins. This is a developing story, and the report does not explain why Intel fell more than Amazon beyond saying its numbers disappointed.
For anyone with index funds or a retirement account, big tech swings can move the balance. A bumpy stretch is possible.
Investors are testing whether huge AI spending will pay off, so expect bigger swings in tech stocks and in funds that hold them.
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