Amazon, Intel shares fall after earnings amid AI spending concerns
Intel CEO Lip-Bu Tan speaks during a keynote presentation at Computex in Taipei on June 2, 2026.
Cheng Yu-chen | Afp | Getty Images
Intel shares plummeted 29% on Friday, their worst day since the 1970s, after the chipmaker issued weaker-than-expected guidance due to a plant shutdown in Israel and ongoing softness in the PC market.
It’s a major setback for CEO Lip-Bu Tan, who was hired in March 2025, and has since been on a campaign to revive the company after it missed out on the early years of the artificial intelligence boom.
Intel’s plunge is also a big hit to the Trump administration, which led the U.S. government into taking a 10% stake in the company over a year ago. While it’s still a profitable investment, the value of those holdings dropped by about $12 billion on Friday. Nvidia also took a big stake in Intel, and its stock dropped by about $6 billion in value.
Heading into Thursday’s earnings report, Intel shares were up about 150% this year, buoyed by demand for central processors, which are becoming critical to agentic AI workloads. Analysts at D.A. Davidson downgraded the stock to neutral from buy on Friday in a report titled, “Not fixed yet.”
“We understand the PC market is being impacted at the industry level,” the analysts wrote. “However it is hard to justify the current multiple when weakness is so significant.”
Amazon and Intel stock chart
Amazon shares also sold off on Friday, slipping 1.4%, after the company reported a third-quarter miss on the top and bottom line while maintaining its capital expenditure forecast for 2026 of $220 billion. Amazon also reported negative free cash flow for the second consecutive quarter, and a big increase from the previous period.
The Nasdaq Composite slid 2.9%, capping off a week of rough tech earnings. Alphabet on Thursday suffered its worst day on record, plunging more than 12%. The stock fell again on Friday.
Other semiconductor names also notched declines. Chip giant Nvidia fell 4%, while Broadcom dropped more than 5% and mobile chipmaker Qualcomm tumbled 11%.
Not a ‘moment of reckoning’
Investors are growing nervous about the massive AI spending from the tech giants and whether their investments will pay off.
“I don’t think this is a moment of reckoning but I think it’s a moment where investors should take a long thought about how positioning across the space still remains crowded even though the fundamentals are strong,” Matt Orton, chief market strategist at Raymond James, told CNBC’s “Squawk Box Europe” on Friday.
For Intel, the disappointing forecast reflects a PC market that’s getting hammered due to soaring costs for memory and other components. Global PC shipments declined 4% in the second quarter from a year earlier, according to Counterpoint Research.
Intel said it expects adjusted earnings per share of 25 cents this quarter on revenue between $15 billion and $16 billion. Analysts were expecting revenue of $17.1 billion and EPS of 43 cents, according to…
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