Amazon shares fell 7% in premarket trading on Friday after the company reported a third-quarter miss on revenue and earnings. Amazon maintained its 2026 capital expenditure forecast at $220 billion and reported negative free cash flow for the second consecutive quarter, larger than the previous period.
Intel plunged 25% in premarket trading after issuing weaker-than-expected guidance and citing ongoing softness in the PC market.
Nasdaq-100 futures dropped 2% in early trading. Chip stocks including Micron, Nvidia, and Arm were lower in premarket trade, while major European semiconductor names including ASML saw sharp declines.
On Thursday, Alphabet shares closed 13% lower, marking its worst single-day drop in history, after reporting ballooning negative free cash flow. Microsoft shares rose after it remained cash flow positive in the September quarter.
Matt Orton, chief market strategist at Raymond James, told CNBC on Friday that while the current period is painful, "the fundamentals by and large still remain in place, especially across the AI capex beneficiary part of the market." Orton said he is "generally okay" with these companies turning free cash flow negative as it is for a "temporary period."
The Nasdaq Composite index is up more than 12% year-to-date as of Thursday's close.