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Hello everyone, I'm Leonie Kidd, bringing you today's Morning Squawk.

Some sectors of the AI transactions are suffering even more.

AI Chat and AI agents are eroding Google's search business, and the impact has reached a level that investors cannot ignore; at the same time, Microsoft's relatively lower capital expenditure figures have also caused the "new cloud" companies to turn down again.

Before Amazon announced its financial results later today, this drove a significant decline in NASDAQ futures.

What's happening: "S" represents selling off.

For Alphabet, today will be a tense day, as its stock price fell by more than 10% in pre-market trading.

• It is worth noting that if the stock experiences a decline of more than 9.77% during today's official trading hours, it will represent the worst market reaction to its financial results in its history.

The data compiled by Robert Hum of CNBC shows that this financial report represents the first time since the fourth quarter of 2022 that Alphabet has failed to meet expectations in both earnings per share and revenue.

Search business is one of the key concerns. Investors have always been worried that AI chat and smart assistants will begin to take a larger share of Google's search volume.

D.A. After the revenue from Davidson's Gil Luria failed to meet expectations for the second consecutive quarter on Google searches, CNBC's MacKenzie Sigalos commented: "This might be the quarter we've been worried about all along."

• Why this is important: The high-profit model of its search business provides strong financial support for Alphabet, and this technology company is currently making significant investments in the infrastructure construction of AI.
• There are also highlights in cloud services: Google Cloud revenue more than doubled, and Google's Chief Financial Officer stated that the TPU system is "a significant contributor."

Microsoft's situation is much clearer. With Azure growing by 48% to become the largest single business for this tech giant, Microsoft's stock price rose before the market opened.

The company led by Satya Nadella also expects its revenue in the second quarter to reach up to $97 billion, far exceeding market expectations.

The company's annual capital expenditure guidance has been reduced to $170 billion.

• Why this is seen as positive: Investors welcome a respite in capital expenditure. Chief Financial Officer Amy Hood stated that there have been delays in the capacity of some third-party data centers, so expenditures may be lower as a result.

Individual stocks with significant fluctuations: There is no positive aspect to speak of.

However, Microsoft's capital expenditure figures, which fell short of expectations, are having a negative impact on "new cloud" companies.

The stock prices of CoreWeave, Nebius, and IREN were under pressure during pre-market trading.

• Why this is important: Microsoft is an important customer for CoreWeave and Nebius. As its reliance on the production capacity of these "new cloud" companies deepens, this impact becomes particularly evident.

In addition, cybersecurity stocks are also worth paying attention to, as these shares have seen a significant decline before the market opens.

The declines of CrowdStrike and Palto Alto Networks both exceeded 6%, and Zscaler and Rubrik also fell by a similar percentage.

• Behind the scenes: The catalyst was Fortinet. The company's stock price fell by 25% after its third-quarter profit margin fell slightly below expectations.

Today's financial report: Will Bezos bring a boost?

Next is Amazon, which will release its financial report after the market closes today.

Analysts expect another quarter with negative free cash flow, while capital expenditures will amount to $5.8 billion.

• Analysis: Jefferies is focusing on the growth of cloud services and indicates that "the acceleration of AWS has not yet ended." At the same time, they claim that this stock is attractive because, despite more cautious consumer sentiment, the retail business remains surprisingly strong.
• Historical guidance: According to the data from Bespoke, there is a 72% probability that Amazon's revenue will exceed expectations, and a 66% probability that its profits will exceed expectations.

From a broader perspective, according to CNBC's calculations, the 'Big Seven of U.S. Stocks' no longer trade as a cohesive entity. This requires investors to be more cautious when selecting the largest stocks in the market, rather than treating them as a single trading unit.

Election Economics: Money, money, money...

2026 has just become the most expensive electoral cycle on record. According to AdImpact data, with only 5 days left until the voting date, the expenditures have already exceeded 11.3 billion dollars.

• The Megan Casella under CNBC is paying attention to how the two parties will use this funds, as well as which legislative proposals that were not originally given much attention have unexpectedly received substantial advertising spending.

Meanwhile, CNBC's Garrett Downs has exclusively entered Northern Dakota Bank. This is the only state-owned bank in the United States, and this concept is attracting increasing attention, especially among Democrats.

• Through this rare behind-the-scenes visit, readers can learn how the bank facilitates transactions to support data center construction.

Finally

With the outstanding performance of Jio Platforms, India's largest telecom operator and digital services company, billionaire Mukesh Ambani became the owner of two of India's most valuable companies, and he wept with joy as a result.

Jio Platforms The stock price continued to rise on Thursday, opening higher by 3.3% again on the first day of trading.

The company, which received support from Meta and Google, went public on Wednesday with a price premium of over 25% compared to IPO, and its market value reached 13.05 trillion rupees (137.1 billion US dollars).

– CNBC's Robert Hum, MacKenzie Sigalos, Kate Rooney, Isabel O, Brien, Jordan Novet, Priyanka Salve, Garrett Downs, and Megan Casella also contributed to this article.

John Melloy edited the content for this issue.