Amazon Vs. Intel: The Good Burn and The Very Bad Burn

Mizuho raised its price target for Amazon (AMZN) to $335, citing strong AWS growth prospects. It projects 40% annual revenue growth for AWS, higher than the consensus. Other analysts have mixed views, with targets ranging from $250 to $355. Amazon plans $220 billion in capital expenditures this year.

Meta plans to raise up to $95B through stock sales, joining other Big Tech firms like Alphabet, Amazon, and NVIDIA in seeking large-scale financing for AI expansion. These companies are turning to debt and equity markets, marking a shift from relying solely on operating cash. Meta's plan includes a $35B stock offering and a $60B at-the-market program, pending Class C share trading in early 2027.

Sandisk (SNDK) shares dropped 14% in a week after Kioxia, its fab partner, warned of fading flash price gains. Intel (INTC) also cited memory cost pressures. Despite record Q1 revenue of $11B and an 85% gross margin, Sandisk's stock fell. Wedbush maintained an Outperform rating and $2,000 target, citing below-average multiples.

Amazon has secured up to $80 billion in supplier financing for technology infrastructure, reflecting its significant AI build-out costs. The company's free cash flow was a $34.8 billion outflow in Q3, indicating heavy spending. Chamath Palihapitiya notes AI companies' funding needs may compete with Treasury issuance, potentially raising borrowing costs. Amazon's 2027 capex outlook, due in early February, will provide further clarity on its financial requirements.

Intel's stock fell 29% to $65.76, its worst day since 1974, despite strong quarterly results. The decline was driven by weak PC sales forecasts and downgrades from financial institutions. Intel expects a 12% decline in PC shipments in 2026 and a 10% decline in 2027. The U.S. government, which holds 10% of Intel's shares, saw a $12 billion paper loss.

Intel (INTC) shares fell near $60 after weak Q4 revenue guidance ($15B–$16B) and warnings of prolonged PC market softness. The stock dropped 28.6% on Friday and 8.8% on Monday. Intel cited structural challenges, including AI-driven memory shortages, manufacturing bottlenecks, and margin compression. The company suspended its dividend and announced layoffs as part of a $10B cost-cutting plan.