Is Nvidia's Earnings Report a Last-Ditch Effort? Amazon and Intel Sent Nasdaq-100 Futures Plummeting

Tech stocks plummeted in premarket trading following another round of disappointing earnings reports, according to Bloomberg. A slowdown in revenue growth at Amazon’s core business—which weighed on the company’s overall results amid multibillion-dollar AI expenditures—as well as Intel’s weak outlook accelerated the exodus of investors from AI-related assets.

Amazon shares fell 7% in pre-market trading, while Intel’s stock plummeted 25%, dragging down the entire sector: futures on the Nasdaq-100 technology index plunged 2%. Futures contracts for the broad-market S&P 500 index fell 0.9%.

New corporate reports—along with Alphabet’s results released on Wednesday — have heightened investors’ doubts about the prospects of the AI sector and raised questions about whether large-scale investments can yield returns quickly enough to justify the companies’ high valuations, Bloomberg reports.

"This earnings season has been a tough one for AI-related companies: the stocks of most of them have come under pressure amid concerns about an AI bubble and inflation, ” said Anna Wu, investment strategist and founder of Floodlines Research, to the agency. “The concern isn’t that demand for AI has already slowed, but that rising financing costs and credit risks could ultimately force hyperscalers to slow down their infrastructure buildout.” According to Wu, “Nvidia’s quarterly results could be the last chance to improve market sentiment during this earnings season.” The chipmaker is expected to report its results on November 17.

“The main takeaway is that investors are no longer satisfied with mere promises related to AI,” says Greg Boland, a strategist at the brokerage firm Moomoo. “Against the backdrop of overvalued tech companies, the market demands more convincing evidence that large-scale investments will generate profits and cash flow. This reinforces risk aversion, triggering a sell-off of tech stocks.”

This news story is being updated.

This article was AI-translated and verified by a human editor