Alphabet, Amazon, Intel: Tech’s Ugly Thursday
Amazon had one job tonight: show Wall Street that all the AI spending is paying off. It didn’t. And it had the worst possible setup for a miss, because Alphabet had already spent the whole day reminding everyone what happens when that question goes unanswered.
Start with the regular session. The Nasdaq fell 1.38% to 26,184, the S&P 500 slipped 0.31% to 7,720, and the Dow lost 0.25% to 52,342. The Russell 2000 went the other way, gaining 1% to 2,859, a three-week high. That split dominated the day. Money flowed out of megacap tech and into small caps, healthcare, and financials. Breadth was healthy, too. On the NYSE, advancing stocks beat decliners by close to 2-to-1 for much of the day, which isn’t what a broad selloff looks like.
One name did most of the damage. Alphabet dropped roughly 12–13%, its worst day on record. It missed on revenue and profit, search ad growth slowed sharply, and free cash flow was negative for a second straight quarter while capex more than doubled to $51.4 billion. Google Cloud grew 103%, and nobody cared. Software got pulled down as ServiceNow and Fortinet gave outlooks the market hated. Microsoft beat on both lines and still finished lower. The market has stopped paying for AI spending on faith. It wants to see the return.
Macro was actually friendly. Q3 GDP came in at a 3.4% annualized pace, above expectations of 3.1–3.2%, up from 2.2% in Q2. Core PCE rose 3.1% year over year, in line with forecasts. Treasury yields eased, with the 10-year just under 5%, and that’s a big reason small caps finally had a good day. The Fed held rates on Wednesday, two officials wanted a hike, and Warsh is effectively pointing at December. Rate cuts aren’t on the table right now.
Then Amazon reported after the bell. Revenue was $201.9 billion against roughly $202.3 billion expected, and EPS was $1.89 against $1.96, so it missed on both. AWS was the bright spot: $46 billion in revenue, up 39%, with Jassy calling for growth above 40% in both 2027 and 2028. The market didn’t buy the long-range promise. Q4 revenue guidance of $240–247 billion brackets the Street’s number without beating it, 2026 capex stays at $220 billion, and trailing free cash flow is negative by about $42 billion. The stock fell as much as 10% after hours before settling down around 7%.
The chart matters most here. AMZN closed at $243.79, down 4% for the day, putting it right on its 200-day moving average around $243. Tonight’s after-hours trade is well below that line, and the next real support shelf sits around $233. If it opens below the 200-day and can’t get back above it, that’s a chart change, not just a bad print.
Intel made it a rough night for tech overall. It beat on Q3, with $16.5 billion in revenue and $0.52 in EPS against about $0.40 expected. But it guided Q4 to $15–16 billion against roughly $17 billion expected and $0.25 in EPS against $0.43, blaming PC weakness and a fab explosion in Israel. The stock fell more than 20% after hours, which erases a big chunk of a huge year-to-date run in one print.
Going into Friday, Nasdaq futures will have to absorb two big misses on top of Alphabet. Watch whether the small-cap rotation holds or whether selling turns broader. One day of rotation is a trade. A second day starts to look like positioning.