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# WickedDesk Weekly #020: Amazon grows. What is left?

AWS accelerates while Amazon’s expansion absorbs cash. Intel reports strong server demand and Sandisk another record quarter. Plus Microsoft, Alphabet, consumers, healthcare, energy and unchanged policy rates.

**Topics:** Market rotation, Relative strength, Momentum swing trading, Weekly preparation

## AWS grows quickly. So does the cash required.

Two things are happening at Amazon. AWS grows almost 40%, yet investment leaves no positive free cash flow over twelve months. Intel sells substantially more server chips while guiding to lower revenue next quarter. Sandisk expects another increase.

Those differences matter more to me than a blanket verdict on AI stocks. Where does growth come from? How much cash remains after spending? And do investors still buy the story after the results?

This edition includes reports released by Friday morning. Existing price comparisons end on 28 October. The six Atlas captures show the ongoing 29 October session at 17:36 to 17:37 CET, before the later reaction to Amazon and Intel. Friday’s US trading session has not begun.

## The Nasdaq rebounds faster than the Dow through Wednesday

QQQ gains +3.01 % from last Friday through Wednesday. The fund tracks the Nasdaq 100. SPY, DIA and IWM represent the S&P 500, Dow and Russell 2000. These are ETF price returns excluding distributions, not official index levels.

The rebound brings QQQ just above its average over the last 50 sessions. It remains below the 21 session average. We can see a recovery, but not yet a reclaimed short term uptrend.

Russell ETF IWM is above its 200 day average but below its 50 day average. SMA means the simple average of closing prices over the stated number of trading sessions. That helps distinguish a weekly bounce from the longer trend.

VIX falls from 19.45 on 23 October to 16.91 on 28 October. It measures expected S&P 500 volatility from option prices, not a guaranteed future move. This too is a Wednesday observation, not a measure of the later Thursday session.

| SMA 21 | SMA 50 | Symbol | SMA 200 | 28 Oct close | Since 23 Oct |
| --- | --- | --- | --- | --- | --- |
| 770.50 | 767.63 | SPY | 728.15 | $772.31 | +1.62 % |
| 732.82 | 725.42 | QQQ | 678.72 | $725.61 | +3.01 % |
| 517.85 | 522.12 | DIA | 505.67 | $524.68 | +0.63 % |
| 277.30 | 285.00 | IWM | 278.53 | $281.29 | +2.01 % |

## What has happened since the previous issue

Alongside the rate decisions, Amazon, Intel and Sandisk have now reported. Healthcare, consumers, industrial equipment and energy add further evidence. These are different businesses, not a uniform boom.

| date | read | type | event | result | source | followUp |
| --- | --- | --- | --- | --- | --- | --- |
| 28 Oct | Two members preferred an increase rather than a cut. | macro | Federal Reserve | Target range remains 3.75 to 4.00% | Sources at the end of this issue | Review the next jobs report alongside yields. |
| 28 Oct, after the US close | Both stocks trade below Wednesday’s close in the Thursday snapshot. | earnings | Microsoft and Alphabet | Revenue grows while investment spending stays high | Sources at the end of this issue | Check after the close whether the opening area was reclaimed. |
| 29 Oct | Energy makes the inflation problem harder. | macro | ECB | Deposit rate stays at 2.50% | Sources at the end of this issue | Track lending conditions and energy together. |
| 29 Oct | Different observation periods, not directly comparable percentages. | macro | US economy | Q3 GDP grows 3.4% annualized; September PCE inflation is 3.6% year over year | Sources at the end of this issue | Compare wages and employment in the coming week. |
| 29 Oct after US close | Segment growth and company revenue are different measures. | earnings | Amazon, Intel, Sandisk | AWS +39.3%, Intel revenue +21%, Sandisk revenue +378% year over year | Sources at the end of this issue | Separate guidance from the first full session after the releases. |

## Alphabet pulls the Nasdaq rebound back down

In the frozen Thursday snapshot, QQQ trades at $715.53, -1.39 % against Wednesday’s close. Microsoft is down -1.29 %, Alphabet -12.34 %. That looks different from the recovery through Wednesday.

The final candle matters here. It is still an open daily candle. The day’s return and distance from the moving averages can change before the close.

Volume bars show shares traded up to the snapshot, not a finished session compared with a full day. ADR in the header means average daily range, calculated here over the previous 20 completed sessions.

| Price | Symbol | Thursday | Opening gap |
| --- | --- | --- | --- |
| $715.53 | QQQ | -1.39 % | -1.25 % |
| $524.19 | MSFT | -1.29 % | +1.73 % |
| $284.80 | GOOGL | -12.34 % | -11.70 % |

## Two Fed members actually wanted higher rates

The Fed leaves its target range at 3.75 to 4.00% on 28 October. Lisa Cook and Beth Hammack dissent because they prefer a quarter point increase. That is not a broad shift toward cuts.

This is uncomfortable for growth stocks. Much of their present valuation depends on profits expected years from now. When safer interest rates remain high, investors need stronger reasons to pay a high price for those distant profits today. Businesses are not equally exposed. A company with dependable surplus cash has more options than one that regularly needs new financing.

## The ECB holds while energy makes the tradeoff harder

The ECB also leaves all three policy rates unchanged on 29 October. Its deposit rate remains 2.50%. It identifies higher energy prices as a risk to inflation and growth. Maturing bonds in its purchase portfolios continue to run off.

Cheaper borrowing could support demand and investment. It cannot make energy immediately cheaper. Keeping financing costs high, meanwhile, hurts businesses already squeezed by expensive inputs. That tradeoff makes quick relief difficult.

There is also a leadership change ahead. Christine Lagarde announces that she will leave on 7 February 2027, not today. Her successor and the resulting balance of views are not yet established.

## US growth accelerates while monthly inflation remains a problem

Real US GDP grows at a 3.4% annualized rate in the third quarter, following 2.2% in the second. The actual quarterly increase is 0.8%. Annualization extends one quarter’s pace over a full year.

The PCE price index measures prices of personal consumption expenditures. In September it rises 0.5% on the month and 3.6% from a year earlier. Excluding food and energy, annual inflation is 3.1%. Real consumer spending barely changes.

A higher price level does not automatically mean people are buying more goods. For consumer businesses, I want to know whether they are selling more units or mainly charging more. Similar revenue growth can produce very different underlying results.

## A growing money supply does not guarantee easier credit

Broad money M3 grows 3.5% year over year in September, unchanged from August. M1, which includes cash and overnight deposits, grows a little more slowly at 2.7%. These September figures are not an effect of the 29 October decision.

In the bank lending survey, a net 9% of banks tighten corporate credit standards. Loan demand declines on balance. Net 9% is a survey measure, not a 9% fall in lending volume.

A company making large investments needs more than a quoted policy rate. It must obtain financing, provide security and meet interest payments. That is why I keep money growth, lending conditions and a company’s actual cash generation separate.

## Amazon grows. What is left after investment?

AWS generates $46.0 billion in third quarter sales, up 39.3% from a year earlier. Amazon revenue rises 12% to $201.9 billion. Moving Prime Day weighs on the retail comparison. Cloud contributes $17.8 billion of the company’s $28.1 billion in operating profit.

Yet trailing twelve month free cash flow is negative $42.4 billion. Operations generate $168.3 billion, but expansion absorbs more. That is a cash outflow, not a net accounting loss or a claim that Amazon cannot pay its bills.

Fourth quarter guidance is $240 billion to $247 billion in sales and $28.5 billion to $33.5 billion in operating profit. Planned 2026 cash capital expenditure remains about $220 billion. Demand exists. The question is when the additional capacity generates more cash than its buildout consumes.

Amazon’s cash figure covers twelve months. The Microsoft and Alphabet graphic covers one quarter. These amounts should not appear as directly comparable bars.

## Microsoft grows, but its opening jump does not hold so far

Microsoft reports quarterly revenue of $92.28 billion, up 19% year over year. Azure grows 48%. Operating cash flow is $58.00 billion, with $39.37 billion paid for property and equipment.

The stock opens +1.73 % above Wednesday’s close. By the snapshot, it has lost 2.97% from that opening price. It remains above its 50 day average but slips below its 21 day average. So far, the positive opening gap has been sold rather than held.

Next I would watch whether buyers defend the 50 day area and bring the stock back above the shorter average. A close below the former would put more pressure on the recovery from the summer.

## Alphabet’s Cloud growth is not enough

Alphabet raises quarterly revenue 25% to $127.58 billion. Google Cloud grows 103%, including TPU system sales, so this is not entirely recurring software revenue. After $51.36 billion of capital spending, free cash flow is negative $9.07 billion.

The stock opens -11.70 % below Wednesday’s close. At $284.80 in the snapshot, it is far below all three averages discussed here. A large fall does not automatically make a stock cheap. It first needs to establish a durable floor before a new uptrend becomes a reasonable chart observation. One green day would do little to establish that.

Subtracting cash paid for investment from operating cash flow leaves Microsoft with a calculated $18.63 billion. Alphabet spends more on that basis than its operating business generates. This does not mean Alphabet is insolvent. It describes the financing need in this quarter.

The calculation excludes additional assets financed through noncash lease additions. It is not a comparison of every investment commitment.

Two questions remain for the next reports. Will earnings grow alongside the new assets? And how long must a business fund spending before it produces more surplus cash? Revenue growth alone answers neither.

## Intel sells more server chips. Sandisk raises the outlook.

Intel revenue rises 21% to $16.5 billion. Data Center and AI grows 78% to $7.3 billion, while the PC focused business declines 5%. Fourth quarter revenue guidance is only $15 billion to $16 billion. Server demand is strong; PCs remain a problem.

Sandisk’s first fiscal quarter of 2027 brings revenue of $11.031 billion, up 378% from a year earlier and 23% sequentially. Next quarter guidance is $12.2 billion to $12.6 billion. Adjusted earnings per share are expected to rise from $49.51 to between $55 and $57.

These earnings figures are before the announced stock split. Split adjusted trading is expected to begin on 20 November at an eight for one ratio. Eight times as many shares does not mean eight times the company value. Historical and new share prices and earnings must be compared on the same basis.

A shared semiconductor label does not make these businesses interchangeable. Intel faces weak PCs alongside server growth; Sandisk benefits from the memory boom. Whether investors keep paying more for either story is a separate question for the chart.

| Symbol | Outlook | Revenue | Comparison | Earnings per share |
| --- | --- | --- | --- | --- |
| INTC | Q4 revenue: $15 billion to $16 billion | $16.5 billion | +21% year over year | $0.60; adjusted $0.52 |
| SNDK | Q2 revenue: $12.2 billion to $12.6 billion | $11.031 billion | +378% year over year | adjusted $49.51 before split |

## The earnings week extends beyond technology

Caterpillar grows through higher equipment sales and prices. Lilly sells substantially more units while realised prices decline. Mastercard offers another view of payments and spending. Starbucks shows why total revenue and comparable store sales need to be separated.

All four reports were released on 29 October. Revenue and growth refer to each reported quarter, not the full year. Adjusted figures exclude selected expenses or gains. They are not a uniform accounting measure across companies.

Understanding where growth comes from is more useful than picking the largest percentage. More customers, higher prices and a changed company perimeter tell different stories.

| Detail | Symbol | Revenue | Earnings per share |
| --- | --- | --- | --- |
| Higher volume and prices; adjusted operating margin 20.6%. | CAT | $20.7 billion; +17% | $7.13; adjusted $7.20 |
| Full year revenue guidance rises to $91 billion to $92 billion. Not every earnings measure rises alongside it. | LLY | $24.4 billion; +39% | $7.22; adjusted $7.48 |
| Purchase volume +9% in local currencies. Not evidence of stronger real spending everywhere. | MA | $9.8 billion; +14% | $5.28; adjusted $5.31 |
| Comparable store sales +7.2%. The China transaction weighs on consolidated revenue. | SBUX | $9.1 billion; minus 4% | $0.59; adjusted $0.80 |

## Technology leads through Wednesday, but not every large stock participates

Technology ETF XLK gains +4.24 % from 23 to 28 October. Communication services ETF XLC loses -2.25 %. Healthcare ETF XLV adds just +0.25 %, even though several of our healthcare studies perform much better.

Choosing a sector does not replace examining the individual chart. One strong stock also does not establish that investors are buying an entire industry. The graphic uses eleven sector ETFs over identical dates, not an equal weighted average of all their constituent stocks.

Thursday’s losses following the technology reports are not included in this completed Wednesday comparison.

The existing studies stay in the comparison. Micron and Marvell rebound sharply through Wednesday while Twilio falls further. Within healthcare, CareDx and Natera outperform the broad sector ETF.

Returns start at the 23 October close and end at the 28 October close. They are not returns from an original entry, and no purchase is assumed.

| Symbol | 28 Oct close | Since 23 Oct |
| --- | --- | --- |
| MRNA | $214.17 | +7.03 % |
| CDNA | $72.13 | +4.22 % |
| NTRA | $424.27 | +5.03 % |
| OKTA | $222.66 | +4.51 % |
| CRWD | $266.66 | +3.53 % |
| PANW | $394.49 | +3.66 % |
| MU | $983.23 | +12.04 % |
| MRVL | $251.65 | +10.13 % |
| TWLO | $253.77 | -3.06 % |

## CareDx stays near its recent highs

CareDx trades at $72.48 in the Thursday snapshot, above its 21, 50 and 200 day averages. Following its climb since the summer, it remains better preserved than many large technology stocks.

I want to see whether it can spend several days trading more tightly below the recent high instead of falling deeply after each advance. That would give a clearer area for evaluating a later decision. It is currently +7.99 % above its 21 day average. Tight trading and a nearby average are not the same thing.

A lasting move below that shorter average would weaken the current stability. A breakout that immediately fails would also be a reason to put the study aside.

## Okta recovers from a weak opening

Okta opens Thursday with a -5.94 % gap. By the snapshot, it has recovered +3.46 % from the open but remains -2.69 % below Wednesday’s close.

The distinction matters. Looking only at the move since the open shows a recovery. Including the previous close still shows a loss. The stock remains slightly above its 21 day average.

For next week, I want to see whether that average holds on completed sessions and whether the stock can approach its recent highs again. Losing the recovery entirely would no longer look like a contained pullback. I do not infer a new corporate catalyst from price action alone.

## Moderna rebounds, but the earlier damage stays in the record

Moderna gains +7.03 % from 23 to 28 October and adds +2.34 % in Thursday’s snapshot. After the sharp decline discussed in the previous issue, that is initially a recovery. It does not erase the earlier damage.

The stock is back above its 21 day average. Now it needs to hold there and establish a new trading range. A few unfinished sessions do not make a tight base.

For a constructive continuation, I would want smaller pullbacks that are not immediately sold down again. Falling below the reclaimed average and back into the recent low area would argue against it. The price rise is not evidence of a positive drug trial result.

## Space stocks bounce while the longer trends remain weak

Rocket Lab gains +11.41 % through Wednesday, AST SpaceMobile +6.31 %, Planet Labs +6.86 % and Intuitive Machines +10.17 %. All four remain below their 200 day averages. This is a recovery within weaker long term charts, not a coordinated breakout near yearly highs.

SpaceX, trading as SPCX, is also below its 21 and 50 day averages. The available history does not yet contain enough sessions to calculate a 200 day average. That line is neither added nor estimated.

I would first want the recovery to leave higher lows over several weeks. New contracts, launches and approvals need their own evidence. Price gains alone do not establish a fresh news catalyst this week.

| Symbol | 28 Oct close | Since 23 Oct |
| --- | --- | --- |
| SPCX | $145.23 | -1.53 % |
| RKLB | $58.60 | +11.41 % |
| ASTS | $42.30 | +6.31 % |
| PL | $14.33 | +6.86 % |
| LUNR | $11.59 | +10.17 % |

## Oil eases but remains expensive

The official spot series used here ends on 27 October. Brent is $123.10 a barrel, down from $128.30 on 23 October. WTI falls from $109.72 to $103.37 over the same dates. These are not live Thursday futures prices.

US inventory data offer no blanket all clear. Commercial crude falls 1.9 million barrels in the week to 23 October and distillates fall 1.5 million. Distillate inventories are 10% below their five year average.

US natural gas storage, by contrast, totals 3,724 billion cubic feet, roughly 1% above its five year average. That describes the United States, not European gas supply.

For businesses, the question is whether lower daily prices are already reducing actual energy costs. Contracts, hedges and transport can delay that effect.

Shell shows how elevated energy prices reach a company’s accounts. Third quarter adjusted earnings are $10.814 billion, compared with $5.432 billion a year earlier. Operating cash flow reaches $21.043 billion. Higher refining margins and LNG prices help. That supports this supplier, not households or energy intensive businesses. Shell’s reported $16.322 billion in free cash flow also includes total investing cash flow. It is not the same calculation as operating cash flow minus capital expenditure.

## Nearly five percent over ten years still competes with stocks

The ten year US Treasury yield is 4.99% on 27 October and the two year yield is 4.70%, a difference of 0.29 percentage points. Both observations precede the Fed decision and cannot establish its subsequent market impact.

Long duration Treasury ETF TLT loses -0.43 % in the completed comparison through Wednesday. Its price is not a bond yield. Longer maturities are more sensitive to changes in rates.

For stocks, a high safer yield raises the hurdle for future earnings. For indebted businesses, refinancing dates also matter. An existing fixed rate loan and a bond maturing soon are economically different situations.

## Gold and Bitcoin do not solve every portfolio problem

Gold ETF GLD gains +1.88 % through Wednesday while silver ETF SLV gains +0.70 %. Both remain below their 200 day averages. A long term case for precious metals does not prevent weak months or interim losses.

Bitcoin closes 28 October at 81,343.50 USDT, about 0.19% above the 23 October UTC close. Ether is roughly 1.17% lower at 2,359.68 USDT. A USDT quote is not a guaranteed dollar price.

Coinbase and Strategy do not form a coordinated strong advance in the completed US stock comparison either. For a broader crypto move, I would want more than a single Bitcoin rise. Several related stocks holding above their important averages would provide better supporting evidence.

## Save the chart before the report, then compare what happened

Microsoft is a useful example this week. Before the open, its positive gap looked encouraging. Later it trades below the previous close. Looking only at the later chart makes it easy to forget what you originally expected.

In Atlas, you can save the view as a chart study in your Journal or Model Book and connect it to a Playbook. Write down what you want to see and what would disprove the idea. After the report, compare that saved view with the current chart.

For Microsoft, the concrete question would have been whether the opening jump held. For Okta, it would have been the recovery from the weak open. This turns a collection of attractive charts into a review of your actual observations. The answer is allowed to be that you were wrong.

A familiar stock does not automatically belong on a new study list. This comparison uses 28 October closing prices. A Thursday recovery would change the assessment only if it develops into a more durable structure.

| Reason | Symbol | What needs to change |
| --- | --- | --- |
| Below its 21, 50 and 200 day averages; weaker since Friday | META | A base and reclaimed averages, not just one green session. |
| Below its 21 and 50 day averages; falls despite recovery elsewhere in software | TWLO | Stabilization and a sustained return above the intermediate average. |
| Below its 21, 50 and 200 day averages; does not confirm a broad crypto advance | COIN | Strength in its own chart rather than Bitcoin alone. |

## Early November brings rates, jobs and AI demand together

After Amazon, Intel and Sandisk, I want to see whether the first full session after the results produces a move that holds into next week. A good report alone does not establish that. For Intel, weak PCs and server growth have to be considered together. For Sandisk, high expectations matter alongside guidance. At AWS, the question remains whether fast growth leaves more cash after investment.

ISM’s US manufacturing report arrives on 2 November. The BLS publishes job openings on 3 November, the same date AMD reports. The Bank of England decides on 5 November. Friday 6 November brings the October US employment report.

After the US clock change on 1 November, Germany is again six hours ahead of US Eastern Time. Payrolls arrive at 14:30 CET and Tuesday’s job openings at 16:00 CET.

Lower bond yields alongside large technology stocks reclaiming lost areas would support the recovery. High yields and strength limited to a handful of healthcare stocks would leave a narrower selection. CareDx, Okta and Moderna therefore stay in the comparison with their different starting points. A new name needs a good reason to replace them.

This issue is for information and preparation. It is not personalized investment advice, a buy recommendation or a promise of returns.

## Sources
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- [www.bankofengland.co.uk](https://www.bankofengland.co.uk/events/upcoming-events)
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- [www.intc.com](https://www.intc.com/filings-reports/all-sec-filings/content/0000050863-26-000188/q326earningsrelease.htm)
- [investor.sandisk.com](https://investor.sandisk.com/news-releases/news-release-details/sandisk-reports-fiscal-first-quarter-2027-financial-results)
- [www.caterpillar.com](https://www.caterpillar.com/en/news/corporate-press-releases/h/3q26-results-caterpillar-inc.html)
- [investor.lilly.com](https://investor.lilly.com/news-releases/news-release-details/lilly-reports-third-quarter-2026-financial-results-raises-full)
- [investor.mastercard.com](https://investor.mastercard.com/files/content_files/3Q26-Mastercard-Earnings-Release.pdf)
- [investor.starbucks.com](https://investor.starbucks.com/news/financial-releases/news-details/2026/Starbucks-Reports-Q4-and-Full-Fiscal-Year-2026-Results/default.aspx)
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