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Nasdaq futures sink as Amazon, Intel intensify AI spending fears

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Nasdaq futures sink as Amazon, Intel intensify AI spending fears

Business News Tech AI Nasdaq futures sink as Amazon, Intel intensify AI spending fears

Shares of Amazon.com were down 6.3% in premarket trading after the company reported a sharp cash outflow in the third quarter and signaled another increase in capital expenditure next year, on top of already elevated outlays.

Nasdaq futures slid more than 2% on Friday after Amazon 's plans for continued heavy AI spending and Intel 's warning of cash burn this year deepened investor concerns about escalating costs of AI infrastructure buildout and the timeline for returns. Shares of Amazon.com were down 6.3% in premarket trading after the company reported a sharp cash outflow in the third quarter and signaled another increase in capital expenditure next year, on top of already elevated outlays. Intel tanked more than 25% after the chipmaker warned it would burn cash this year due to a weak market for personal computers, manufacturing bottlenecks and heavy spending to expand production.

Amazon and Intel were set to wipe out about $300 billion in combined market value, if losses hold, putting the Nasdaq-100 on track to erase roughly $950 billion. 4 trillion loss in market value so far this month. "If we summarize the Big Tech results: cloud growth was strong, but the companies are spending huge amounts to deliver that growth. Together, Amazon, Google, Microsoft and Meta spent more than $200bn in the third quarter alone," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. " Several companies have tapped the bond market to fund their hefty AI investments, fueling concerns that higher borrowing costs could make such spending harder to justify.


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