Nasdaq Composite falls 1.4% ahead of Amazon results as Intel faces AI spending pressure
Key Facts
The Nasdaq Composite fell 1.4% on Thursday, October 29, losing 365.13 points to close at 26184.72, ahead of results from Amazon and Intel after the market close. The decline came as investors renewed scrutiny of the scale of AI spending and how quickly it is translating into revenue. In morning trading before the market opened that day, Nasdaq 100 futures had fallen 1.22%, or 366 points, at 08:48 Eastern Time, according to Reuters via Investing.com. These figures do not establish a 1.7% decline in futures following the two companies’ results. Amazon reported after the market close, turning investors’ attention to its operating performance and elevated AI spending.
The initial reaction to Amazon’s results was negative, with the company’s shares falling 7% in after-hours trading when the results were released, according to the Associated Press. The company reported third-quarter results, with sales and earnings per share below analysts’ estimates. FactSet estimates put quarterly sales at 202.2 billion dollars and earnings per share at 1.97 dollars. That gap leaves the company facing a dual test: whether its core operations can meet market expectations and whether investors will accept its AI spending. Amazon shares closed at 243.79 dollars on October 29, according to EL7 data, but the closing price alone does not determine the stock’s move after the results were announced.
Discussion of Amazon also centers on the balance between growth in its cloud business and the cost of AI investments, as investors focus on core operations and elevated spending, the Associated Press reported. Reuters said investors had begun scrutinizing the timing of AI returns relative to the pace of capital spending. An investment official said: "Investors have started scrutinizing revenue timelines compared with the pace of capital spending burn." The report added that some investors are no longer giving major cloud-computing companies unlimited latitude to spend. That puts spending efficiency and the timing of returns at the center of how technology companies’ results are assessed, alongside revenue growth and quarterly earnings.
Amazon’s fourth-quarter outlook remains in focus, with FactSet analysts forecasting sales of 244.16 billion dollars, below the upper end of the company’s guidance, according to the Associated Press. The next comparison will therefore extend beyond the reported quarterly result to include the company’s ability to reach its target range and deliver growth in line with market expectations. AI investments and capital spending may remain central to investors’ assessment of the outlook, having emerged as a source of pressure in the initial reaction. The available evidence does not establish Intel’s share-price move after its results, so no specific decline can be attributed to it and no market reaction can be described. Investors are now watching for the market’s assessment of the two companies’ results and their subsequent outlooks.