Why Google, Amazon, Intel shares crashed up to 23%
What's the story
Shares of tech giants Alphabet (Google), Amazon, and Intel plummeted on Thursday. The decline was as steep as 23% in after-hours trading. The drop comes as investors are worried about rising artificial intelligence (AI) spending and weakening cash flows. Alphabet's stock fell over 13%, its worst single-day performance ever, losing half a trillion dollars in market capitalization.
Financial performance
Alphabet's Q3 results fell short of Wall Street expectations
Alphabet's third-quarter results fell short of Wall Street expectations, with a slowdown in its core search advertising business and rising AI expenditure.
The company reported a negative free cash flow of $9.1 billion for the September quarter, contrary to analysts' predictions that it would remain close to breakeven.
This marked the second consecutive quarter of negative free cash flow for Alphabet after an outflow of $5.9 billion in the June quarter.
Earnings report
Amazon's shares also fell
Amazon's shares also fell over 4% on Thursday after the company reported weaker-than-expected third-quarter results.
The e-commerce giant posted earnings of $1.89 per share, slightly below analysts' estimates of $1.96.
Revenue stood at $201.94 billion, just below the Street's estimate of $202.31 billion.
Amazon maintained its 2026 capital expenditure outlook at $220 billion for the year.
Financial outlook
Amazon reported negative free cash flow
Amazon reported $42.4 billion in negative free cash flow over the last 12 months, a whopping 386% swing year-on-year.
This is the second consecutive quarter of negative free cash flow for the company after reporting an outflow of $7.6 billion in Q2.
For Q4, Amazon forecasted revenue between $240 billion and $247 billion, with the midpoint guidance falling short of Wall Street's estimate of $244.5 billion.
Market response
Intel's shares fell over 23%
Intel's shares fell over 23% in after-hours trading on Thursday, following a weak fourth-quarter forecast.
The chipmaker cited continued weakness in the global PC market as the reason for its subdued outlook.
Despite a 78% jump in data center and AI revenue to $7.3 billion, Intel's client computing and physical AI group reported a 5% year-on-year decline in revenue to $8.1 billion, missing estimates.