Key Takeaways
- • Amazon forecast holiday-quarter sales below Wall Street expectations and shares fell about 7% after hours, while Alphabet closed down nearly 13% on Thursday after a weak earnings report, according to Reuters.
- • Alphabet and Meta both burned cash in the September quarter, while Microsoft, the only exception, joined their borrowing binge with a $25 billion debt sale.
- • Intel shares fell 18% after it blamed "near term headwinds across the PC industry" and disclosed a factory explosion in Israel that caused a two-week shutdown and roughly $600 million in lost revenue over two quarters.
- • AI cloud stocks CoreWeave, Nebius and Iren fell 5.8% to 6.7% after hours as investors grew wary of smaller firms borrowing heavily to fulfill large order backlogs.
- • The Philadelphia-style SOX semiconductor index has declined 13% from its October high and is 21% below its June all-time high, after tightening financing terms kept some IPOs on the sidelines.
Summary
Wall Street's concerns about the cost of the AI buildout intensified after the market close on Thursday, as results from Amazon and Intel showed that the infrastructure race is straining not only the technology industry but also consumers, according to Reuters. Surging data-centre spending has turned once debt-light technology giants into major borrowers. Alphabet and Meta both burned cash in the September quarter, while Microsoft, the only exception, joined the borrowing trend with a $25 billion debt sale on Thursday.
Amazon forecast holiday-quarter sales below Wall Street expectations, a possible sign of mounting consumer pressure as inflation picks up. Its after-hours slide of about 7% was accompanied by losses of 5.8% to 6.7% in AI cloud stocks CoreWeave, Nebius and Iren. Investors have grown increasingly wary of smaller AI cloud firms borrowing heavily to deliver on enormous order backlogs. Alphabet closed regular trading down nearly 13% after a messy earnings report and fell another 1.5% after hours.
Intel, whose shares were down 18%, blamed "near term headwinds across the PC industry" and said a factory explosion in Israel caused a two-week shutdown that would cost it roughly $600 million in lost revenue over two quarters. Price hikes driven by a memory chip shortage have also squeezed global demand for smartphones and PCs, and PC makers HP and Dell fell 8% and 6.8%. Kim Caughey Forrest, founder and chief investment officer at Bokeh Capital Partners LLC, said revenues missed on lower PC demand and forward guidance disappointed.
The semiconductor index sold off after hours, with AMD down 4% and Broadcom down 2%, and the Direxion Daily Semiconductor Bull ETF, which seeks three times the daily performance of the SOX, fell 9%. Analysts such as Michael James of Rosenblatt Securities attributed the weakness mainly to Intel's guidance and negative sentiment spillover, and some noted that Intel's PC exposure does not carry the same scrutiny as the AI buildout.
The SOX had risen more than 60% in 2026 on shortages of chips and equipment needed for the AI buildout, but the trade has been tested over the past month by tightening financing terms. Those terms have kept some expected IPOs on the sidelines and pressured highly leveraged AI infrastructure firms. Jake Dollarhide, chief executive officer of Longbow Asset Management, said Intel's rise had drawn considerable retail money, "some of that money is easy come, easy go."
Amazon forecast holiday-quarter sales below Wall Street expectations, a possible sign of mounting consumer pressure as inflation picks up. Its after-hours slide of about 7% was accompanied by losses of 5.8% to 6.7% in AI cloud stocks CoreWeave, Nebius and Iren. Investors have grown increasingly wary of smaller AI cloud firms borrowing heavily to deliver on enormous order backlogs. Alphabet closed regular trading down nearly 13% after a messy earnings report and fell another 1.5% after hours.
Intel, whose shares were down 18%, blamed "near term headwinds across the PC industry" and said a factory explosion in Israel caused a two-week shutdown that would cost it roughly $600 million in lost revenue over two quarters. Price hikes driven by a memory chip shortage have also squeezed global demand for smartphones and PCs, and PC makers HP and Dell fell 8% and 6.8%. Kim Caughey Forrest, founder and chief investment officer at Bokeh Capital Partners LLC, said revenues missed on lower PC demand and forward guidance disappointed.
The semiconductor index sold off after hours, with AMD down 4% and Broadcom down 2%, and the Direxion Daily Semiconductor Bull ETF, which seeks three times the daily performance of the SOX, fell 9%. Analysts such as Michael James of Rosenblatt Securities attributed the weakness mainly to Intel's guidance and negative sentiment spillover, and some noted that Intel's PC exposure does not carry the same scrutiny as the AI buildout.
The SOX had risen more than 60% in 2026 on shortages of chips and equipment needed for the AI buildout, but the trade has been tested over the past month by tightening financing terms. Those terms have kept some expected IPOs on the sidelines and pressured highly leveraged AI infrastructure firms. Jake Dollarhide, chief executive officer of Longbow Asset Management, said Intel's rise had drawn considerable retail money, "some of that money is easy come, easy go."
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