Nasdaq 100 Futures Dip On Weak Intel, Amazon Earnings With Bloated Capex Worries Weighing On Sentiment — AMZN, INTC, SBUX, PLTR, ASTS In Focus

• The S&P 500 ended Thursday 0.3% lower, the Nasdaq 100 fell 1.4%, and the Dow Jones Industrial Average eased 0.3%.
• Amazon spent upwards of $77 billion on property and equipment over the quarter ending September.
• Intel reported third-quarter revenue of $16.5 billion, up 21% year-over-year.

U.S. stock indices ended lower on Thursday and extended declines after-hours as bloated capital expenditures from Amazon fanned investor fears that the AI capex cycle might have gotten ahead of itself.

  The S&P 500 ended Thursday 0.3% lower, the Nasdaq 100 fell 1.4%, and the Dow Jones Industrial Average eased 0.3%. The Russell 2000, which tracks small-cap stocks, added 1%.

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Meanwhile, Nasdaq-100 futures lost 1.5%, while futures tied to the S&P 500 slid 0.7%. Dow futures fell 0.1%. 

The SPDR S&P 500 ETF (SPY) fell 0.4%, and the SPDR Dow Jones Industrial Average ETF (DIA) slipped 0.4%. Meanwhile, the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) ended 1.4% lower on Thursday.  

Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF dropped about 1% each on Thursday amid weakness in AMD, Micron Tech (MU) and Broadcom (AVGO). The broader Vanguard Information Technology ETF (VGT) fell 1.1%.

Retail sentiment on Stocktwits for SPY improved to ‘bullish’ from ‘neutral’, while it remained in ‘bearish’ territory for DIA and QQQ.

US Market Drivers

Amazon.com Inc. (AMZN) share price dropped about 7% after hours after the e-commerce giant reported third-quarter capital expenditures that far exceeded Wall Street projections, underscoring investor anxiety that the AI buildout might not translate into sufficient revenue. 

The company stated that it spent upwards of $77 billion on property and equipment over the quarter ending September, primarily channeled into constructing new data centers and expanding its computing capabilities. This aggressive expansion resulted in a free cash outflow of $42.4 billion. Total revenue for the period climbed 12% to reach $201.9 billion.

Meanwhile, Intel Inc. (INTC) share price tumbled about 17% after-hours. The company forecast weaker-than-expected fourth-quarter revenue and earnings amid a slump in personal computer (PC) sales and supply bottlenecks. 

Investors have been growing increasingly jittery around justifying bloated capital expenditure plans of hyperscalers and large tech firms, with doubts growing that these expenses might not convert into substantial revenue. 

“I think we’re in a better, more stable place in October and heading into November in the tech trade than we were in August and September. But that said, I think investors are becoming much more selective,” Art Hogan, chief market strategist at B. Riley Wealth Management, told CNBC. 

“I think we’re in an environment where there’s less concern and negativity over tech writ large, but I think specifically, you can certainly get announcements from individual players that will move the needle.” 

Key Trending Stocks

JPMorgan is turning bullish on Palantir Technologies Inc. (PLTR), forecasting a stock rally of more than 30% as major corporations increasingly prioritize artificial intelligence platforms that maximize returns. 

Nvidia CEO Jensen Huang on Thursday reportedly said that the company’s dealings with a Singapore-based cloud customer under U.S. investigation were ordinary business, and that Nvidia has checked to make sure the firm did not illegally ship its AI processors to China. 

Shares of Starbucks (SBUX) dipped 3% after hours on Thursday after the company said that its fourth-quarter revenue dipped on China restructuring efforts even as it reported stronger same-store sales and profits that marked further progress in its turnaround efforts. 

Shares of AST SpaceMobile (ASTS) jumped as much as 6% on Thursday after the Federal Communications Commission advanced a plan to make it easier for satellites to connect directly to ordinary phones. 

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