Nasdaq-100 selloff deepens as Amazon and Intel extend AI spending doubts
Technology shares extended their decline after Amazon and Intel results intensified investor scrutiny of the cash demands and returns associated with artificial-intelligence investment.
Focal Brief
The Nasdaq-100 fell about 3.5% on October 30 as Intel plunged 28.9% and Amazon lost 1.4%, extending a technology selloff triggered by concerns about the cost and near-term returns of heavy AI investment.
Focal Facts
- Alphabet shares fell 12.6% on October 29, their worst one-day decline on record, after quarterly revenue and earnings missed Wall Street estimates.
- Microsoft priced $25 billion of senior unsecured notes on October 29. The company said proceeds may support general purposes including capital expenditure, but did not allocate them specifically to AI.
- Amazon reported 39.3% AWS sales growth, while Intel posted $16.5 billion in quarterly revenue but issued a weaker-than-expected profit outlook.
Focal Point
The clearest next signal is whether rising AI infrastructure spending produces stronger free cash flow and durable profit growth. Nvidia’s November 17 earnings will provide another test of demand across the AI supply chain.
The decline was not a uniform rejection of AI demand. Amazon said AWS revenue grew at its fastest rate in nearly five years, while Intel’s quarterly revenue and earnings exceeded its guidance. Investors instead focused on Amazon’s weaker profit and Intel’s fourth-quarter forecast, which raised doubts about how quickly infrastructure demand will translate into dependable earnings.
Alphabet’s record share decline a day earlier added to those concerns after its spending on property and equipment exceeded $51 billion during the quarter. Microsoft, whose quarterly cloud growth remained strong, separately priced a $25 billion debt offering. Its filing listed several possible uses, including capital expenditure, share repurchases and acquisitions, so the financing does not establish a specific AI allocation.
The consequential question is whether the next round of results can demonstrate that accelerating AI revenue is beginning to outpace the cash required to build and operate the infrastructure behind it.