A batch of earnings reports landed, and most of them disappointed. Big market leaders that drove the first half of the year are now posting double-digit drops after hours. This earnings season does not look good.
Amazon (AMZN)
Shares fell fast after the print, down 6.5% at first and reaching an 11% drop. Third-quarter EPS came in at $1.89, a miss against the street's $1.97 estimate. Net sales of $201.9 billion also missed the $201.26 billion estimate - a miss on both top and bottom lines.
North America net sales were $112.85 billion, below the $113 billion expected. Amazon Web Services (AWS) net sales were $45.98 billion, slightly above the $45.68 billion estimate and in line overall. Free cash flow fell to an outflow of $42.4 billion over the trailing 12 months. A currency headwind cut results by about $900 million, likely affecting analyst estimates.
Fourth-quarter net sales guidance is $240 to $247 billion, close to the street's roughly $244 billion. Capital spending is still expected near $220 billion, a reiteration of the prior figure. Operating margin hit 13.9% versus 12.9% expected - its highest ever.
The bigger worry is the retail side rather than AWS, since North American sales reflect the consumer directly. Negative free cash flow is now hitting nearly every Mag Seven company except Microsoft, and Microsoft may turn free-cash-flow negative next quarter. The heavy AI spending is draining Amazon's cash, which had already turned negative. The company has also been cutting jobs over the last four years.
Google's results are seen as a warning sign for Amazon. The street will likely discount the in-line December guide because of the long-term risk that personalized AI bots pose to the business. Those bots could become the logical starting point for anything people buy. Amazon wins on three things - finding what you want, speed, and trust - but the first will come under increasing attack. The NASDAQ fell 1.5% on the day.
Intel (INTC)
Shares crashed 22%, roughly three times the expected 7% move. The story is guidance. Third-quarter EPS was 52 cents, beating the 40-cent estimate. Revenue of $16.51 billion rose 21% year-over-year but just missed the $16.54 billion estimate.
Adjusted margins were 44.1% versus 42.1% expected. Adjusted operating margins were 19.6%, about 3% above the 16.5% estimate. Data center and AI revenue of $7.32 billion beat. Client computing revenue of $8.1 billion missed badly against the $8.82 billion expected. Foundry revenue of $6.7 billion beat the $6.12 billion consensus. Free cash flow was $1.64 billion, well below the $2.98 billion estimate, but still positive.
Every guidance number missed. Revenue guidance of $15 to $16 billion missed the roughly $17 billion estimate by about a billion. EPS guidance of 25 cents missed the 43-cent estimate. Adjusted gross margin guidance of 38% missed the 42.8% estimate. Intel sees the PC slowdown lasting at least through the first half of 2027 and stays optimistic on its broader portfolio.
A plant fire in Israel hit its server chip supply. That fabrication plant will cut the Q4 revenue outlook by $300 million and hit margins by 200 basis points, about 2%. Even so, that does not cover the guidance miss. Foundry and AI look strong but still need to ramp up. The core client solutions business - PCs - remains weak, bucking the stronger trend seen at peers like Texas Instruments (TXN).
Intel is a heavily held name with lots of hype. The US government is trying to help, and Elon Musk and others are reportedly trying to do deals with the company, but the fab has a long way to go. On the conference call, Intel could announce a new customer that turns the story around, which has happened before. This is still a bad report, which is why shares are down 15-17%.
SanDisk (SNDK)
The numbers were good but shares dipped, down 1.25% and later about 2.4%, before turning positive by 1%. For its fiscal first quarter of 2027, revenue was $11.03 billion, up 23% and beating the $10.69 billion estimate. EPS of $4.951 beat the $4.636 estimate. GAAP diluted EPS was $5.26, up 20% sequentially. Gross margins of 85.1% beat.
Data center revenue was $4.8 billion, edge revenue $5.83 billion, and consumer revenue $397 million. SanDisk will return $5 billion to shareholders through a buyback of about 3.2 million shares during the quarter.
Fiscal second-quarter revenue guidance of $12.2 to $12.6 billion sits entirely above the $12.1 billion estimate. EPS guidance of $55 to $57 tops the $52.72 estimate. Gross margin guidance of 84.5% to 85.5% brackets the 84.8% estimate. The company announced an 8-for-1 forward stock split effective November 19th.
Recent talks with leading customers point to more demand upside, with customer signals extending demand beyond fiscal year 2030. The weak reaction is likely a victim of negative tech-sector news, with bigger leaders down 15-17% in after-hours trade. Shares were already down about 5.5-6% into the close. Stock splits often give a boost, which may come tomorrow.
Reddit (RDDT)
Shares fell more than 10%, later down about 7.5%. Third-quarter revenue rose 53% year-over-year to $895 million, beating the $869 million estimate. Net income was $283.3 million, a diluted EPS of $1.40, both up 70% year-over-year and beating. Adjusted EBITDA of $402.3 million was also up 70% and beat.
Daily active users were 130.3 million, a miss by only about 3 million users. Search referral traffic was meaningfully down in Q3. Reddit warned that if that decline continues, daily active users could fall by a low double-digit percent. Fourth-quarter revenue guidance of $1 billion to $1.03 billion and adjusted EBITDA of $480 to $510 million both missed estimates.
This is a big deal for Reddit. The stock is already down almost 30% since the last earnings. As Google search traffic gets cannibalized by AI agents, the key question is what happens to Reddit's referral traffic. Investors want a sense of how people interact on a human-to-human level, which is the value the company will try to push. They want proof of that on the call.
Coinbase (COIN)
Shares first rose 1%, then turned down 1% and later 1.75%. Third-quarter revenue of $1.22 billion was in line. Transaction revenue of $590 million beat the $575 million estimate. Subscription and services revenue of $570 million also beat. Adjusted EBITDA of $332.9 million beat the $282.9 million estimate - its 15th straight quarter of positive adjusted EBITDA. Net income was $719 million, and adjusted net income $78 million.
Trading volumes were $134.5 billion. Crypto trading volume market share reached 10.7%, double year-over-year and a fourth straight quarter of share gains. Prediction markets grew 82% quarter-over-quarter, passing $200 million in annualized revenue in Q3.
Fourth-quarter subscription and services revenue guidance is $550 to $630 million versus the $615 million estimate, slightly above the midpoint. Transaction revenue is about $165 million quarter to date. Full-year 2026 adjusted expense guidance was narrowed to $4.15 to $4.3 billion. The company called trading conditions soft during the quarter.
Prediction markets are gaining traction and could be the future tailwind if Coinbase can monetize them. The Q4 subscription and services guidance range is very wide - about $80 million between top and bottom - which some may see as light. The width reflects the volatile core business. Crypto trading is strong but loses appeal as perpetual futures enter the market and 24-hour trading hits formalized exchanges. Coinbase may struggle to compete with brokerage houses that offer crypto trading plus other investments in one place, which is what consumers want.
Starbucks (SBUX)
A mixed report, shares down about 0.5%. EPS of 80 cents beat the 71-cent estimate, up 54% year-over-year. Operating margins of 14% beat. Revenue fell 4% to $9.1 billion, missing the $9.23 billion estimate. The decline mainly reflects the shift of China retail operations to a licensed joint venture model.
Comparable sales rose 7.2%, beating the 6.23% estimate. US comp sales rose 7.7% versus 6.5% expected. International comp sales rose just 0.9%, missing the 3.36% expected.
For fiscal 2027, Starbucks guided EPS of $3.15 to $3.25 against a $3.13 consensus. Operating margin guidance of 13.5% to 14% beat. Guidance includes North America comp sales growth of about 4%, net store additions of about 1,200, and consolidated net revenue falling 1% year-over-year, including $700 million tied to the 53rd week. The company said it is ahead of schedule on its fiscal 2028 financial framework. A rumored tie-up with Chipotle (CMG), which Starbucks denied during the quarter, was not mentioned.
International stores underperformed, but the US turnaround plan keeps working, with the home market topping expectations. That shows continuation and sustainability of the turnaround under the back-to-basics campaign, an important read ahead of the holiday season. For now, the company expects transaction growth to continue.
