US Big Tech Under Pressure | Rewire Morning News Brief

Alphabet posts worst single-day performance in 20 years, dragging Nasdaq down 1.4%. After hours, Amazon falls about 7%, Intel briefly drops over 20%, as anxiety over AI returns in tech stocks heats up.

1 | Alphabet stock plunges 12.6%, dragging Nasdaq down 1.4%

Alphabet Class A shares closed down 12.6% on Thursday, marking the worst single-day performance in more than 20 years since its listing. The previous night, the company reported third-quarter revenue up 25% year-over-year to $127.58 billion, still slightly below expectations, with net income falling to $26.17 billion from $34.98 billion a year earlier. Search advertising revenue grew 12% to $63.3 billion, and Google Cloud revenue grew 103% to $30.7 billion, but the company expects capital expenditures to increase significantly in 2027. Investors are concerned about returns on AI investment and the monetization pace of the search business. Alphabet's sharp decline dragged the Nasdaq down 1.4%, while the S&P fell 0.3%, with most individual stocks still rising, indicating that pressure is concentrated in large-cap tech stocks. After hours, Amazon fell about 7%, and Intel shares briefly dropped over 20%, as reactions to tech earnings continue to diverge. (Continued from yesterday's report)

(Source: Associated Press / Reuters)

2 | U.S. third-quarter GDP grows 3.4%, information equipment investment surges 37.4%

The initial estimate from the U.S. Bureau of Economic Analysis shows real GDP grew at an annualized rate of 3.4% in the third quarter, up from 2.2% in the second quarter and exceeding the 3.0% expectation from a FactSet survey. Business investment (excluding residential) grew 12.7%, information processing equipment investment jumped 37.4%, software grew 9.6%, R&D grew 7.5%, and consumer spending rose 3.8%. Meanwhile, the September PCE inflation annual rate rose to 3.6% from 3.4% in August. Strong growth and rebounding inflation appearing simultaneously make it harder for rate-cut expectations to extend in one direction. The surge in equipment investment aligns with AI data center construction, but the BEA did not separately classify this investment as AI. The BEA noted that accelerated investment and a swing to positive government spending drove faster growth, while falling exports offset some of the increase. This GDP figure is still a first estimate and will be revised later.

(Source: U.S. Bureau of Economic Analysis GDP initial estimate / Associated Press / U.S. Bureau of Economic Analysis PCE data)

3 | AWS revenue grows 39.3% year-over-year, Amazon maintains $220 billion in capital expenditures

Amazon's third-quarter net sales were $201.9 billion, up 13% year-over-year. AWS revenue was $45.984 billion, up 39.3%, the fastest in nearly five years. Andy Jassy said the company still expects full-year cash capital expenditures of about $220 billion, mainly for AI data centers, and expects AWS growth to exceed 40% over the next two years. The other side of investment returns is cash flow: free cash flow for the trailing 12 months through the end of September was negative $42.4 billion, compared with positive $14.8 billion a year earlier. The stock fell about 7% after hours following the earnings report, with the market focused on holiday-season sales guidance and cash burn. Yesterday's morning briefing already covered AI computing returns and capital expenditures; the new signal from this earnings report is that AWS is accelerating, yet cash flow continues to be weighed down by infrastructure investment. The market's yardstick is extending from cloud growth rates to cash conversion speed. (Continued from yesterday's report)

(Source: Amazon Investor Relations / Associated Press)

4 | DoorDash Announces Acquisition of Instacart, Deal Valued at Approximately $17 Billion in Equity

DoorDash announced the acquisition of Instacart at $65 per share, with an equity value of approximately $17 billion, at least 75% of the consideration in cash, representing a 26% premium over the October 22 closing price before deal rumors emerged. DoorDash's delivery network will be combined with Instacart's grocery fulfillment, retail advertising, and AI tools, covering both apps and merchants' own websites. The agreement still requires regulatory and shareholder approval. Yesterday's morning briefing noted Amazon expanding off-site product offerings and Google integrating apps into Gemini; today's development marks a shift from competing for the consumer interface to acquiring fulfillment networks. One holds traffic, the other holds the last mile — the combined entity will more directly challenge large retailers. The company has incorporated advertising and AI tools into its integration vision, but the deal has not yet closed and integration outcomes remain to be seen. (Continued from yesterday's report)

(Source: DoorDash Official Announcement / Associated Press)

5 | Thrive Holdings to Acquire ADT at $15.3 Billion Enterprise Value

Thrive Holdings has agreed to acquire U.S. security company ADT in an all-cash deal at $10 per share, representing an equity value of $7.6 billion and an enterprise value of $15.3 billion, a 45.6% premium over the October 27 closing price unaffected by deal news. The acquisition is expected to close in the first quarter of 2027, subject to shareholder and regulatory approval. ADT has built its equipment, professional installation, monitoring services, and monthly subscriptions into residential and small business networks. The buyer stated it will invest in technological capabilities, and TechCrunch reports it plans to bring AI into home security. For long-term capital, the device and service relationships already established inside users' homes may be a more suitable entry point for technological transformation than competing for users from scratch. The announcement also committed to maintaining existing data protection and privacy policies.

(Source: TechCrunch / The Information)

Also Worth Knowing ↓

Mistral opens Large 4 weights, allowing enterprises to deploy independently. Mistral states the model has 1 trillion parameters with 52 billion activated parameters, and the open-weight version has undergone additional training. Yesterday's morning briefing noted Gemini 4 Carbon being prioritized for cyber defenders; this marks a new development in access methods: deployers gain more control but must also bear responsibility for model security management themselves. (Source: Mistral Official / TechCrunch)

Polymarket halted international trading for about an hour due to a third-party vendor security incident. The platform said the issue has been fixed and trading has resumed, and that affected users will be fully compensated, but it did not disclose the number of people affected or the total losses. (Source: AP / WIRED)

Volkswagen posted a net loss of €5.8 billion in the third quarter, with revenue down 6.3% year on year. A roughly €6.4 billion impairment on its Porsche stake was a major one-off factor, while weak demand in China, US tariffs and declining EV profits are also weighing on results; the two need to be viewed separately. (Source: AP / Reuters)

CREA estimates that China's clean technology exports could help avoid about 450 million tons of carbon emissions per year this year. The estimate covers the potential emissions reductions from exported solar, battery and EV equipment after being put into use overseas, roughly equivalent to Brazil's annual emissions. This is a model estimate, not realized emissions reductions. (Source: AP / Carbon Brief)

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