Oct 29, 2026 · 43 min
Big Tech earnings expose a higher bar for the AI trade
Closing Bell Overtime: Big Tech Faces Another Earnings Test 10/29/26
The results show how AI spending, memory shortages, consumer weakness, and lofty expectations are reshaping technology valuations and market leadership.
- 1Intel and Amazon delivered results that were acceptable in parts but failed against unusually high expectations for guidance and growth.
- 2Memory shortages are pressuring PCs and consumer electronics while strengthening the case for selected semiconductor and storage beneficiaries.
- 3The earnings cycle is testing whether AI infrastructure spending can keep expanding faster than the risks to companies’ core businesses.
Don't miss
Stacy Rasgon explains why an acceptable Intel quarter still triggered a sharp sell-off once weaker guidance and elevated valuation were considered.
The brief
Alphabet’s decline opened a broader reckoning over the AI trade: investors are weighing disruption to Google’s search business against the enormous capital spending required to build hyperscale infrastructure.
Intel beat for the quarter but issued sharply weaker guidance, with memory prices and constrained PC budgets weighing on demand; analysts debated whether its foundry and AI ambitions can outlast the near-term shock.
Amazon’s miss centered on retail and holiday-quarter expectations, even as AWS grew strongly. Tom Forte tied the reaction to consumer risks, delivery competition, and agentic shopping tools.
SanDisk’s strong results offered a counterpoint, as analysts argued that the shift from AI training to inference could create durable demand for flash-based SSD storage.
Stacy Rasgon said Intel’s quarter was acceptable but its revenue, margin, and PC guidance were far weaker than expected, exposing how valuation amplified the sell-off.
The hosts conclude that earnings are separating companies whose core businesses face AI disruption from franchises that can still justify heavy infrastructure investment.
What was said on this episode
24 statements · 12 positive · 11 negative · 1 mixed
The overall PC market is expected to decline 20–25% this year.
“We've seen estimates for the market down now between 20 and 25 percent for the overall PC market for this year.”
Listen at 9:39
AMD’s AI products will partly offset its PC exposure.
“They are getting the AI trade as well. They're shipping their Helios product and their MI450, so that is going to be a bit of an offset that Intel just doesn't yet have in scale.”
Listen at 10:32
PC supply-demand conditions will likely remain similar next year.
“I don't think it's going to be. We're probably going to face this same similar supply demand dynamics next year that we're facing today.”
Listen at 11:53
Intel’s AI opportunity will persist and likely accelerate with agentic workloads.
“The AI trade for Intel is still very persistent and likely to accelerate as agentic just becomes a bigger piece of the workload”
Listen at 12:58
Intel is likely to become a genuine TSMC competitor.
“we are big proponents that they are likely to become a real TSMC competitor in the future.”
Listen at 14:41
Investors should buy Intel aggressively during the decline.
“I'd be buying here aggressively into this downdraft.”
Listen at 15:10
- Tom Forteon Amazon consumersNegative18:18
Higher gas prices and macroeconomic weakness are affecting Amazon consumers.
“it looks like Amazon is starting to get affected, or at least its consumers are getting more affected by higher gas prices, you know, a challenging macroeconomic environment.”
Listen at 18:18
Amazon’s stock will rebound over the next trading day.
“I expect the stock to rebound over the next trading day.”
Listen at 19:04
- Tom Forteon DoorDash–Instacart combinationPositive19:24
The combined DoorDash–Instacart company would be stronger than either standalone competitor.
“I think it makes a stronger combined company.”
Listen at 19:24
Consumer trust is the main challenge for agentic e-commerce.
“I think the big challenge for these agentic e-commerce opportunities is the trust factor.”
Listen at 20:23
- Mehdi Hosseinion AI inferencePositive23:52
AI inference will require more storage than current workloads.
“inferencing will require more storage.”
Listen at 23:52
SanDisk has annualized pre-split earnings power of $250, implying further upside.
“I believe in an annualized earning power of $250 pre-split. So there's still plenty of upside from here.”
Listen at 24:04
TSMC has no viable leading-edge foundry competitor.
“there's still no viable company. competition to TSM and TSMC continues to be the primary leading edge foundry.”
Listen at 24:38
Intel is unlikely to secure customer wafer-loading work within two years.
“I just don't see any customer working with Intel for wafer loading. one or two years from here.”
Listen at 25:04
HBM growth may slow in 2028 while SSD growth continues at its current pace.
“HBM may not sustain the growth in 28, but SSDs will continue to grow at the same pace.”
Listen at 25:44
CPU shipments have exceeded PC demand for several quarters.
“CPUs have been overshipping for the last several quarters relative to PCs.”
Listen at 31:04
Intel will probably cite supply constraints on its earnings call.
“They will probably talk about supply constraints.”
Listen at 31:48
Intel’s stock is extremely expensive based on visible earnings.
“the stock is extremely expensive.”
Listen at 33:33
Memory shortages will likely weaken smartphone and consumer-electronics shipments.
“We'll probably see the same thing on smartphones, frankly, or in broader consumer electronics.”
Listen at 34:14
The memory shortage may persist for an extended period.
“the memory situation may not resolve for a while.”
Listen at 35:05
Semiconductor-capital-equipment companies are an attractive way to invest in shortages.
“We'd like semi-cap as another way to play this.”
Listen at 36:03
Microsoft is the easiest AI investment because of valuation and core-business strength.
“Microsoft seems to me the one that is is the easiest invest here, given both valuation and the core business”
Listen at 39:38
The AI investment cycle may not expand the overall revenue opportunity substantially.
“I don't know. where the revenue pie changes that much.”
Listen at 40:16
Amazon’s returns on equity and investment are less concerning than peers’ returns.
“the return on equity, return on investment for Amazon, I am less concerned”
Listen at 40:27
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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