Nasdaq-100 Futures Fall 2% as AI Spending Fears Deepen

Nasdaq-100 futures fell about 2% in Friday premarket trading after Amazon and Intel results sharpened investor doubts over AI spending, hitting chipmakers from AMD to Nvidia.

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Futures tied to the Nasdaq-100 index fell roughly 2% before the opening bell on Friday, October 30, as results from Amazon (AMZN) and Intel (INTC) revived questions about whether record AI investment will earn adequate returns. The drop pointed to a sharp reversal for the Nasdaq QQQ complex, which tracks the index. S&P 500 futures were down about 1%, while Dow futures were little changed. The Nasdaq Composite had already fallen 1.38% on Thursday.

What Happened to Amazon and Intel?

Amazon and Intel each reported quarterly results that beat or matched demand signals but alarmed investors on spending, cash flow and outlook.

Amazon reported third-quarter net sales of $201.9 billion, up 12% from a year earlier. Earnings per share of $1.89 fell short of the $1.97 consensus. Revenue at Amazon Web Services rose 39% to $45.98 billion, its fastest pace in nearly five years. The pressure came from capital expenditure, which reached $77.3 billion in the quarter against $35.1 billion a year earlier and roughly $58.7 billion expected. The company now projects about $220 billion of capex for 2026. Trailing twelve-month free cash flow turned negative at $42.4 billion. Shares fell about 7% in after-hours trading and held that loss in premarket.

Intel's third-quarter revenue rose 21% to $16.5 billion, and non-GAAP earnings of $0.52 per share beat expectations. Data center and AI revenue climbed 78%, while client computing declined 5%. The reaction centered on guidance. Intel forecast fourth-quarter revenue of $15 billion to $16 billion and non-GAAP earnings of about $0.25 per share, with non-GAAP gross margin near 38% against 44.1% in the third quarter. The company pointed to a weak PC market and supply limits for its Xeon server processors. Shares fell about 25% in premarket trading.

Together, the two companies stood to lose about $300 billion in market value if the premarket declines held.

Why Did Chip Stocks Fall So Sharply?

Chip stocks fell because Intel's guidance and Amazon's cash burn challenged the assumption that AI infrastructure spending will convert smoothly into profit.

The reaction shows how crowded the trade has become. AI stocks have driven a large share of index gains this year, so a shift in sentiment toward the biggest spenders moves the Nasdaq-100 more than the broader market. The Dow's near-flat reading reflects its lower weighting in technology.

Is Amazon's AI Spending Showing a Return?

Amazon's cloud results show demand is real, but the cash flow figures show the return has not yet arrived.

AWS growth of 39% exceeded the $45.29 billion revenue consensus. Management guided to growth above 40% in both 2027 and 2028 and cited a contracted backlog of $578 billion, more than double the level a year earlier. Those figures support the case that data center capacity is being sold before it is built.

The market is weighing that backlog against the cost of delivering it. Capex more than doubled year on year, and the 2026 plan of about $220 billion leaves little room for free cash flow to recover soon. Investors treated the quarter as a spending and cash event rather than a demand shortfall. That distinction matters for the chip supply chain. Strong cloud demand supports orders for accelerators and networking silicon, but a sustained drop in hyperscaler share prices could push spending plans under closer review.

Strategic Context

Intel's position differs from Amazon's. Its data center business is growing at a record pace, and the chief executive has named additional supply for Xeon as the immediate priority. The company completed a $23 billion equity offering to fund expansion, and heavy capital needs are weighing on near-term returns. The fourth-quarter guide implies that the investment cycle is arriving ahead of the earnings recovery.

For AMD, Broadcom and Nvidia, the pressure is largely sentiment-driven. Their order books are tied to the same hyperscale budgets that Amazon has now raised sharply. The premarket declines reflect a repricing of risk around those budgets rather than a change in announced customer demand.

What Comes Next for the Nasdaq-100?

The next test is whether Friday's open confirms the futures signal and whether other large technology companies face similar scrutiny on spending. Investors will watch for any change in capex guidance from other hyperscalers, for evidence that AI revenue is scaling faster than depreciation and power costs, and for follow-through selling in semiconductors. A stabilization in Intel and AMD would suggest the move was company-specific. A broader slide in Nvidia and Broadcom would indicate a wider reassessment of AI valuations.

Outlook

Nasdaq-100 futures fell about 2% as Amazon's $77.3 billion capex quarter and Intel's weak fourth-quarter outlook deepened concern over AI spending. Demand indicators remain strong, with AWS growing 39% and Intel's data center revenue up 78%. The market's focus has shifted to free cash flow, margins and the pace at which heavy investment turns into earnings.