US Stock Futures Slip After Amazon Disappoints, AI Costs Raise Concerns

US stock futures edged lower on Friday following a disappointing outlook from Amazon (AMZN), which joined Google (GOOG) and other major tech companies in expressing concerns about AI development costs.

* Dow Jones Industrial Average futures (YM=F) traded flat.
* S&P 500 futures (ES=F) and Nasdaq futures (NQ=F) declined 0.1%.

AI Becomes Key Focus in Earnings Season

AI discussions have dominated earnings season since DeepSeek's announcement shook the industry. Concerns about escalating AI development expenses at Meta (META) and Microsoft (MSFT) have made investors hesitant to continue investing without evidence of tangible returns.

Amazon's earnings report echoed these concerns, with the tech giant disappointing investors with its outlook. Shares fell around 4% after Thursday's closing bell.

Upswing in Defense and Ad Tech Stocks

Amid the challenges faced by tech giants, AI has enabled some companies to gain market share. Palantir's (PLTR) military analytics business surged 10% on Thursday, adding to its rally earlier in the week. Pinterest (PINS) also utilized AI to boost ad sales, reporting a 19% increase in extended trading.

Other Market Updates:

* The unpredictable tariff news from President Trump has impacted markets, prompting investors to seek stability in assets like gold (GC=F).
* Trump announced plans to close a loophole allowing hedge fund managers to pay capital gains tax instead of income tax.
* Investors await the January jobs report on Friday for insights into the health of the US economy and labor market.

China Tech Sentiment Improves

Chinese tech stocks traded in Hong Kong are on track for a bull market, boosted by DeepSeek's AI model igniting interest in Chinese internet firms. The Hang Seng Tech Index rose 2.5%, bringing its year-to-date gain to 20%.

Amazon Warns of Capacity Constraints in AI

Amazon has warned investors of potential capacity limitations in its cloud computing sector, despite plans to invest $100 billion in 2023 for data centers, chips, and AI services.