Hi Traders!
The Nasdaq selloff has another catalyst tonight: Amazon (AMZN) and SanDisk (SNDK) have now reported, and both stocks are being sold. In the after-hours price action I’m watching, AMZN is roughly 10% below its prior close, SNDK is down 8.67%, and Nasdaq-100 futures are down roughly 450 points.
This follows Alphabet’s earnings destruction during Thursday’s session. Earlier today, GOOGL was down about 12%, trading near $285 after Wednesday’s $324.89 close. The $300 support level I was watching broke, and Amazon and SanDisk have now added pressure after the bell.
Despite Microsoft’s strong report, the broader market still isn’t getting the support it needs. My short-term bias is bearish: I think these reactions make more downside and follow-through selling on Friday more likely. I’ll watch whether buyers can reclaim broken levels and hold them; until that happens, I’m preparing for continued weakness, especially if the September and October lows break. As of right now, the Nasdaq broke the 30k price point, but it is still barely clinging to price support where buyers could come in on the open. While possible, I’m rating it as not likely, as selling usually begets more selling.
GOOGL: Cloud Was the Only Beat
Google Cloud revenue grew 103% to $30.7 billion, ahead of estimates. That is an insane level of growth, and it’s a big reason I still like the company long term.
The problem is that almost everything else missed. Adjusted EPS came in at $2.67 against the $3.02 estimate, and revenue was $127.58 billion against $128.22 billion expected. Search grew 12% to $63.35 billion, but it came in below estimates for the second quarter in a row.
Then there’s the cash. Free cash flow was negative $9.07 billion, much worse than the roughly negative $2.7 billion analysts expected. Capex was $51.36 billion for the quarter, and management said 2027 capex will increase significantly.
But the numbers and the reaction are different beasts, and the biggest problem that Google is now facing is the complete destruction of its technical pattern.
Compare that to Microsoft. Its strong report and positive free cash flow gave investors a clearer fundamental picture, and while the gap to new highs didn’t hold, the overall technical pattern remains constructive and bullish, with multiple squeezes and in a buy zone.
In fact, it wasn’t that long ago that Microsoft was suffering the same fate as Amazon today, with its stock being sold off heavily due to AI spending. But guess what? Microsoft finally reversed course and proved its investments were absolutely worth it. I believe that makes it a continued buy up into $600, and ultimately, Amazon will prove the same.
If only Microsoft’s results had been enough to offset the selling elsewhere! Investors want AI growth to translate into cash flow, and tonight’s reaction in Amazon puts that issue back in focus.
GOOGL Earnings: Beyond Support and the Expected Move
In Monday’s Earnings Watchlist on Options Earnings, I pointed out that 2 of Google’s last 4 post-earnings moves were to the downside and that it had recently broken the 200 SMA. I was watching to see if it could reclaim that zone, which was needed for the stock to recover.
Heading into the report, the at-the-money straddle priced in about ±$19.15, or 5.9%, with GOOGL near $323.51. That put the expected range at roughly $304.36 to $342.66.
I analyze post-earnings moves based on expected ranges, and at the $280.36 low in that snapshot below, the decline was about 2.3x. That was well beyond the expected range and through $300 support, also breaking through price support and filling the bullish gap from April.
This is the Earnings Destruction pattern. The stock went into earnings stuck below the 200 SMA after a 6.1% gap down last quarter. When a stock is stuck under resistance like that, it needs a massive catalyst to recover; without one, selling takes hold. Any move of 1.5x to 2x the expected move on the open often results in a post-earnings trade idea, and this one is well past that. The stock closed down $-41.07, or 12.64%, which is significantly more than expected. With this major technical break, Google is not a buy for me. Technical destruction like this can take a long time to recover from.
GOOGL, October 28 initial after-hours snapshot near $300.47, with a marked low of $299.02. This earlier chart captures the first earnings reaction; Thursday’s subsequent decline toward $285 is discussed above.
Nasdaq Selloff: Microsoft Couldn’t Offset the Pressure
On Tuesday, I said the Nasdaq looked oversold, and I was watching for buyers to confirm a reversal. Microsoft delivered a strong report, but Alphabet’s selloff damaged that recovery attempt. Now Amazon and SanDisk are adding to the pressure in extended trading.
Microsoft reported revenue of $92.3 billion, up 19%, and Azure growth of 48%. Those are strong numbers, but they haven’t prevented weakness from spreading across other major technology names. Microsoft’s earnings release provides the full results.
My NQ chart shows Nasdaq-100 futures at 29,112.75, with a displayed decline of 449.25 points, or 1.52%, about 2.5 hours after the cash close today. Price remains below the moving-average cluster, my candles are all red, and price is clinging to technical support. That combination supports my bearish short-term read going into Friday.
This is why I track which major companies are reporting, as well as the sectors and industry groups they belong to. Amazon’s reaction matters for the Nasdaq, while SanDisk’s reaction is another important signal for memory stocks and semiconductors. I’ll be watching SMH alongside NQ for confirmation of further weakness or an attempt to stabilize.
AMZN Earnings: Strong AWS Growth, a Weak Stock Reaction
Amazon has now reported its third-quarter results. Revenue rose 12% to $201.9 billion, and diluted EPS was $1.89. AWS sales increased 39.3% to approximately $46.0 billion, while operating income reached $28.1 billion. Fourth-quarter revenue guidance was $240 billion to $247 billion. Amazon’s earnings release has the full breakdown.
Revenue and EPS missed the FactSet estimates of approximately $202.2 billion and $1.97, respectively, reported by The Associated Press. Cash flow is another concern: Amazon reported negative free cash flow of $42.4 billion over the trailing 12 months, with rising investment spending primarily tied to AI.
The stock reaction is bearish. My after-hours chart shows AMZN at $228.22, down $26.38, or 10.36%, from its prior close of $254.60. That roughly 10% comparison includes the regular-session decline; it is not an after-hours-only percentage.
Before the report, my expected-move reference was about ±$19.94 with AMZN near $246, giving a range of roughly $226 to $266. The $228.22 snapshot is near the lower end of that range. The chart also marks an initial low of $214.01, showing how far the first reaction extended before recovering.
For Friday, I’m watching whether AMZN can defend and reclaim the 200 SMA on the daily chart at $243, because below that zone, it’s very difficult for me to be a short-term bull. So far, it’s holding the $226 area and may bounce from there, but a $30 or more gap down tomorrow would equal a 1.5x move to the downside, resulting in even more downside. The $225-226 area is critical as well, not just because it’s the expected move, but because it’s where the June and July double bottom occurred. A break of this zone during the cash session will trigger further downside.
That being said, I still like and own the stock long-term, and I would buy it down into $200. The weekly chart pattern still maintains a bullish trend, and short-term spending will lead to long-term growth.
SNDK Earnings: Growth Didn’t Stop the Selling
Sandisk has also reported, and the stock is down 8.67% in after-hours trading. After the weakness elsewhere in technology, this is another negative reaction for the memory trade.
For its fiscal first quarter of 2027, SanDisk reported revenue of $11.0 billion, up 23% sequentially, and adjusted diluted EPS of $49.51. Management guided next-quarter revenue to $12.2 billion–$12.6 billion and adjusted EPS to $55.00–$57.00. Those EPS figures are on a pre-split basis; SanDisk also announced an eight-for-one stock split. Sandisk’s earnings release has the details.
Those are substantial growth numbers, yet the stock is being sold. To me, that reinforces how demanding this market has become: strong business growth alone doesn’t guarantee a bullish earnings reaction, and unfortunately for the memory space, expectations got far too high and have not been able to support current prices. This doesn’t mean it’s a bad space; it just means that prices needed to come down to give us a better opportunity to buy.
My pre-report expected-move reference was about ±$101, or 7.5%, with SNDK near $1,352—a range of roughly $1,251 to $1,453. I’ll use those earlier reference levels to judge Friday’s reaction, especially whether buyers can defend the lower end or whether the selling continues. I also want to see how other memory stocks and SMH respond.
What I’m Watching Next
My focus for Friday is follow-through. If these stocks open lower, do buyers step in and hold the opening lows, or does the gap get sold? A weak bounce that fails to hold above broken support would keep me focused on bearish setups. Reclaiming those levels and holding them would be the first reason to reassess. Remember that I’m a trader, and while I may short the market after earnings destruction breaks in the short term, I’m always looking for long-term investment buys, and I hold my long-term investments through turmoil most of the time. A short-term bearish read from me doesn’t mean the market is on fire forever!
For GOOGL, I’m still watching $300-315 as the first major repair level, but the lack of a catalyst to get us there means it will likely stay weak for now. For AMZN, I’m watching the $226 expected-range area and potential resistance around $245–$255, with buys down into $200. For SNDK, the earlier $1,251 lower-end expected range matters, along with whether memory stocks and SMH attract buyers. I’m planning on buying more Microsoft. NQ’s ability to recover its moving-average cluster will help me judge whether any bounce has staying power.
Microsoft’s strong report hasn’t been enough to offset the damage from the other reactions. My expectation is for more downside risk and possible follow-through selling tomorrow. I can remain bullish on businesses over the long term while trading bearish moves in the short term—that’s part of being a trader.
Review upcoming reports and live expected moves at Options Earnings, and revisit my Earnings Watchlist for the setup I was tracking before these reports.
