Technology stocks are under pressure to end October following disappointing financial results from Amazon (AMZN) and Intel (INTC).
The technology-heavy Nasdaq Composite index is down nearly 800 points or 2.66% in premarket trading on Oct. 30 as investors grow increasingly worried about the artificial intelligence (A.I.) trade.
The benchmark S&P 500 is also in the red on the last trading day of October and down 1%. The blue-chip Dow Jones Industrial Average is up a slight 0.06%.
Markets are being roiled by disappointing financial results from Amazon. The e-commerce giant reported earnings and revenue that each missed Wall Street’s targets.
Seattle-based Amazon reported earnings per share (EPS) of $1.89 U.S., which fell short of the $1.96 U.S. consensus estimate among analysts.
Revenue in the year’s third quarter totaled $201.94 billion U.S., which fell short of the $202.31 billion U.S. that had been expected on Wall Street.
Despite the top and bottom-line misses, Amazon reaffirmed its planned capital expenditure for this year, saying it still expects to spend $220 billion, with most of that money allocated to A.I.
Amazon’s poor results come a day after Google parent company Alphabet (GOOGL) also reported disappointing financial results, reigniting concerns about the A.I. infrastructure buildout.
Alphabet’s stock plunged 12% on Oct. 29, its worst one-day performance ever.
Chipmaker Intel also reported weak financial results after the stock market closed on Oct. 29, sending its stock down 25% in premarket trading.
Intel, whose stock has doubled this year due to the A.I. trade, reported that revenue in its client computing and physical A.I. group fell 5% from a year ago to $8.1 billion U.S., missing targets.
Management at Intel said they expect earnings of $0.25 U.S. per share and revenue of $15 billion U.S. to $16 billion U.S. in the current fourth quarter of the year.
Wall Street expected revenue of $17.1 billion U.S. and earnings of $0.43 U.S. from the company.
Intel blamed the poor results and disappointing outlook on a global slowdown in personal computer sales.
U.S. markets are pacing for a negative month of returns in October, with the Nasdaq Composite on track for a 3% decline.
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