Nasdaq Futures Drop 2%, South Korea's Kospi Falls Over 4% as Asian Chip Stocks Slide in Tandem
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Nasdaq 100 futures extended losses to 2% while Korea's Kospi slid as much as 4.3% and Bloomberg's Asian chip index fell 1.8% — the four big tech spenders are set to pour over $720 billion into capex this year, yet free cash flow has turned negative for three of them, and the market is asking when AI spending will pay off.
What fell in Asia, and by how much?
Nasdaq 100 futures widened their drop to 2% after Amazon and Intel came under pressure in after-hours trading; the sell-off rippled into Asia within hours.
Bloomberg's Asian chip index lost 1.8% on the day; Korea's Kospi fell as much as 4.3%.
SK Hynix and Japan's Advantest each dropped more than 6%, leading the sector lower. This means → the market sold first the names closest to AI capex — memory and test equipment.
How much are the Big Four spending, and what happened to their cash flow?
Amazon, Microsoft, Alphabet, and Meta are projected to spend a combined $720 billion-plus on capex this year — roughly triple the figure from two years ago — and all four expect to keep raising it next year.
Except for Microsoft, the other three have seen free cash flow — operating cash minus investment spending, i.e. the money actually left over — turn negative. Amazon generated $168.3 billion in operating cash over the past year, up 29%, but after data-centre investment, free cash flow was negative $42.4 billion.
Alphabet posted negative free cash flow for a second straight quarter, with quarterly capex topping $51 billion; Meta recorded negative free cash flow for the first time since its 2012 IPO.
In plain terms = these companies are earning plenty of cash, but spending even faster — net cash on hand is now in the red, and that is the core source of market anxiety.
Where is the extra money coming from?
Meta announced a share offering to raise up to $95 billion; SpaceX secured a $40 billion loan to buy dedicated AI chips.
This means → Big Tech has shifted from funding expansion with its own profits to borrowing from the market — financing costs and credit risk are now entering investors' pricing models.
How did markets react to earnings?
Alphabet fell more than 12% the day after reporting — search-ad revenue missed expectations, raising fears that AI chatbots are eroding its core ad business; the company also disclosed potential future lease and other commitments exceeding $1 trillion.
Amazon dropped over 4% after hours; Q3 revenue was $201.9 billion and net profit $20.7 billion, both slightly below consensus. AWS revenue rose 39% year-on-year to $46 billion.
Meta had already fallen 7% the prior week and disclosed more than $800 billion in additional future lease and other commitments.
Nuances are creating a lot of volatility. You spend now, and a lot of the returns don't materialize for years.
David Tsui
Tech credit analyst, S&P Global Ratings
(commenting on this earnings season)
What are analysts saying about the pressure?
Anna Wu, founder and strategist at Floodlines Research, said this earnings season has been "quite tough" for AI-linked companies, with most punished amid AI-bubble fears and inflation concerns.
She warned that higher financing costs and credit risk could ultimately force hyperscalers — the giant cloud platforms such as AWS, Azure, and Google Cloud — to slow infrastructure buildout.
This reflects a shift in the market's core anxiety: the question is no longer "can AI deliver?" but "when will the money spent on AI start coming back?"
What should chip investors watch next?
Intel's weak PC-processor demand forecast has deepened doubts about the sustainability of broader chip demand.
S&P analyst David Tsui cautioned that if spending growth continues to outpace revenue and cash growth, credit-rating agencies will grow "more concerned."
Put simply = whether AI capex can convert into quantifiable returns over the coming years is the ultimate test of this unprecedented capital bet — and the core prerequisite for chip-sector valuations to stabilize.
市场有风险，内容仅供研究参考，不构成投资建议。