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Nasdaq hits near three-month low as Amazon, Intel deepen AI capex concerns
Reuters • • business
Key Points:
- The Nasdaq dropped to its lowest level in nearly three months, with Amazon and Intel's increased AI spending and cash burn warnings fueling concerns over AI infrastructure costs and return timelines.
- Intel's shares plunged over 30% after warning of cash burn due to weak PC demand, manufacturing challenges, and heavy production expansion spending, triggering a selloff in global chip stocks including Nvidia and AMD.
- Amazon fell 2% following a sharp third-quarter cash outflow and plans to increase capital expenditure next year, contributing to a combined potential market value loss of about $200 billion for Amazon and Intel.
- The S&P 500 information technology index fell 3.4%, marking its largest one-day drop since June, while defensive sectors like consumer staples and healthcare gained, reflecting a rotation from popular tech stocks to safer investments.
- The Dow fell 0.39%, the S&P 500 dropped 1.22%, and the Nasdaq declined 2.21%, with all three indexes on track for weekly losses amid concerns over rising interest rates and increased corporate debt to fund AI-related spending.
