The Nasdaq Composite is nearing a correction, down roughly 8% from its closing peak, after underwhelming earnings from companies including Amazon, Intel, and Sandisk fueled investor doubts about the AI trade. Hyperscalers Alphabet, Microsoft, Meta Platforms, and Amazon all fell after earnings despite reporting record profits, while the four together plan to spend more than $700 billion this year on infrastructure. Based on operating income, the group earned roughly $490 billion over the last year, and its $11.5 trillion combined market cap equals 23.5 times operating income, similar to the S&P 500. The shares have sold off largely because all except Microsoft are burning cash on AI build-outs, with Amazon's free cash flow falling to a loss of $34.8 billion in the third quarter. The author argues that fast revenue growth and cloud businesses could help these companies earn a return on their investments, and sees their substantial discounts from recent peaks as an opportunity worth considering.
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tech stocksvaluationcloud computingNasdaqQQQ
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Related tickers and likely impact
QQQ
▲ Likely positiveInvesco QQQ Trust
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/29/2026 | 715.34 |
| Change that session | -1.42% |
MSFT
▲ Likely positiveMicrosoft
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $3.9T |
| Close on 10/29/2026 | 530.14 |
| Change that session | -0.16% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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