Friday opens with the AI trade on the back foot for a second straight day: Nasdaq 100 futures were down about 2.2% to 2.5% and S&P 500 futures about 1% in early trading, after Thursday night delivered the week’s clearest split yet. Amazon missed and kept spending, Intel beat the quarter it just finished and cut the one ahead, SanDisk beat and raised and sold off anyway, and the only clean green print of the morning came from old energy — Exxon Mobil, powered by refining, not data centers.
1. Amazon (AMZN) — AWS accelerated, and the cash burn accelerated faster
Amazon’s third quarter was two stories at once. Earnings were $1.89 a share against about $1.97 expected — a miss, and down from $1.95 a year ago, a year-ago number that included a $9.5 billion pre-tax gain on its Anthropic stake. Revenue was $201.94 billion against about $202.22 billion expected, up 12% year over year, with a Prime Day shift into the second quarter cutting about four points from growth.
The operating business was strong. Operating income rose 61% to $28.1 billion for a 13.9% margin, above the $22.5 billion to $26.5 billion guided range. AWS revenue jumped 39% to $45.98 billion — its fastest growth in about five years and a sixth straight acceleration — with AWS operating income up 55% to $17.77 billion. Advertising rose 11% to $19.6 billion.
What the stock reacted to was cash flow. Third-quarter capital spending on property and equipment was about $77.3 billion, trailing-twelve-month free cash flow swung to a $42.4 billion outflow, Amazon held its 2026 capex plan at about $220 billion, and CEO Andy Jassy said spending would be “meaningfully more in 2027.” The fourth-quarter guide — sales of $240 billion to $247 billion and operating income of $28.5 billion to $33.5 billion — did not offset that. The stock closed Thursday at $243.79, down 4.25%, and fell another roughly 7% premarket Friday to around $226.
What to watch: Whether AWS can keep accelerating near 39% while the capex line keeps climbing — that spread between cloud growth and cash burn is now the whole debate on the stock.
Caution flag: This is the Alphabet pattern from Wednesday, only larger: spend-with-revenue is being rewarded elsewhere, but a trailing free-cash-flow burn that is accelerating, not stabilizing, gives investors no line of sight to when the build pays back.
2. Intel (INTC) — a beat on the quarter, a reset on the guide
Intel actually beat the quarter it reported. Third-quarter revenue rose 21% year over year to $16.51 billion, adjusted earnings were $0.52 a share against about $0.41 expected, and data-center and AI revenue jumped 78% to $7.32 billion.
None of it mattered next to the outlook. Intel guided fourth-quarter revenue to $15 billion to $16 billion against about $17.05 billion expected, and adjusted earnings to $0.25 a share against about $0.43 expected — a big miss on both lines, with PC revenue guided down about 20% quarter over quarter and management warning the PC slowdown runs through at least the first half of 2027. Client computing revenue had already fallen 5% year over year to $8.1 billion in the third quarter.
The stock closed Thursday at $92.07 and traded around $69 to $70 premarket Friday, down roughly 24% to 26%, dragging AMD down about 9%, Nvidia about 3%, and Broadcom about 4% with it.
What to watch: Whether the damage stays contained to PC-exposed names or keeps bleeding into the broader chip complex — Intel’s problem was demand and guidance, not the data-center line, which grew 78%.
Caution flag: Intel was up roughly 150% year to date into this print. A stock priced for a turnaround has no cushion when the turnaround’s next quarter is guided well below the Street.
3. SanDisk (SNDK) — beat, raised, announced a split, and fell 8% anyway
SanDisk posted the strongest numbers of Thursday night and got the same treatment as Seagate on Tuesday. Fiscal first-quarter non-GAAP earnings were $49.51 a share against about $46.67 to $47.15 expected, revenue was $11.03 billion against about $10.6 billion to $10.72 billion expected — up 378% year over year and 23% quarter over quarter, and above the top of the company’s own $10.30 billion to $10.80 billion guide. Non-GAAP gross margin was 85.1%, operating margin 80.4%, adjusted free cash flow was $5.7 billion, and the company announced $5 billion in buybacks and an 8-for-1 stock split, with distribution on November 19 and split-adjusted trading on November 20.
The forward guide beat too: fiscal second-quarter revenue of $12.2 billion to $12.6 billion, non-GAAP earnings of $55 to $57 a share, and gross margin of 84.5% to 85.5%, above the Street on both revenue and earnings, according to Goldman coverage.
So why did the stock close Thursday at $1,330.05, down 5.32%, and fall another roughly 7% to 9% premarket Friday to around $1,210 to $1,230? The call. The CFO guided to only “some modest pricing” in the second quarter and called the third quarter seasonally the weakest, and Morningstar flagged pricing growth decelerating, with a peak on the horizon. Add a global chip selloff — SK Hynix fell about 8.65% in Seoul and the KOSPI about 5.25% — and a beat-and-raise was not enough.
What to watch: Pricing commentary from here. SanDisk’s margins say memory pricing is still near its peak; the stock will trade on any evidence that peak is rolling over, not on last quarter’s 378% growth.
Caution flag: An 85% gross margin is the same peak-cycle question SK Hynix raised on Wednesday. When the debate shifts from “how strong is pricing” to “when does pricing peak,” beats stop protecting the stock.
4. Exxon Mobil (XOM) — the refining boom printed real free cash flow
Exxon Mobil was Friday morning’s exception: a beat powered by cash it is actually returning. Third-quarter adjusted earnings were $4.23 a share against an LSEG average expectation of $4.08, with adjusted earnings of $17.5 billion against about $16.6 billion expected. Revenue rose 32.7% year over year to $113.16 billion on a GAAP basis.
The engine was refining, not production. Energy Products earnings hit a record about $9.05 billion, up about 120% from the second quarter on soaring gasoline and diesel margins — Exxon is now earning more from refining than from upstream for the first time in at least six years, per Reuters, while adjusted upstream earnings fell 20% quarter over quarter to $7.3 billion on lower Brent prices. Production was roughly flat at 4.5 million barrels of oil equivalent a day. Chevron confirmed the pattern the same morning, beating with adjusted earnings of $5.28 a share and its strongest downstream result in at least six years.
The cash contrast with the tech names is stark: operating cash flow of $25.7 billion and free cash flow of $19.1 billion in the quarter, $9.4 billion returned to shareholders ($4.3 billion in dividends and $5.1 billion in buybacks), a dividend raised 3.9% to $1.07 a share, debt reduced by $8 billion in the quarter, and a $20 billion buyback program announced for 2027. The stock rose about 1.5% to 2% premarket.
What to watch: The earnings call’s answers on how long refining margins at this level can last, and whether management steers any of the windfall toward higher distributions or keeps the $20 billion buyback pace flat.
Caution flag: This windfall is war-driven. Brent swung from $68 to $132 a barrel during the quarter amid the U.S.-Israeli war with Iran and strikes on Russian refineries — refining margins that a war creates, peace or a supply response can take away.
The bottom line: This week has sorted the market into two columns with unusual clarity: who collects cash, and who burns it building. Microsoft collected and was rewarded; Alphabet and now Amazon burned — Amazon to the tune of a $42.4 billion trailing outflow — and were punished, even with AWS growing 39%. Intel showed a guide cut can erase a beat in one night, SanDisk showed even an 85%-margin beat-and-raise cannot outrun a pricing-peak debate, and Exxon showed what the other column looks like: $19.1 billion of free cash flow in a single quarter, handed back. The next test is Monday, November 2, after the close: Apple, where the Street expects about $113.3 billion to $113.4 billion of revenue and about $1.98 to $1.99 a share, and Palantir, reporting against its own third-quarter revenue guide of $2.160 billion to $2.164 billion with consensus near $2.18 billion — two very different answers to the same cash question.
Disclaimer: This post is for educational and informational purposes only and is not financial advice, a recommendation, or an offer to buy or sell any security. Investing involves risk, including possible loss of principal. Do your own research and consult a qualified financial professional before making investment decisions.
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