AI companies lost $190 billion in stock market value late Tuesday after quarterly results from Microsoft, Alphabet and Advanced Micro Devices failed to impress investors who sent their stock prices soaring.
The post-bell selloff followed reports from tech giants pledging to embed technology throughout their companies, pushing the company’s stock to record highs following an AI-fueled stock market rally in recent months. This highlights the heightened expectations of investors in response to the
Alphabet fell 5.6% after Google’s parent company reported lower-than-expected advertising revenue in the December quarter.
Alphabet also said spending on data centers to support its AI plans will surge this year, highlighting the costs of fierce competition from AI rival Microsoft.
Driven by interest in AI, Google Cloud’s revenue growth slightly exceeded Wall Street’s targets, but Microsoft’s Azure grew even faster.
Microsoft reported quarterly revenue that beat analysts’ expectations as new AI capabilities helped attract customers to its cloud and Windows services. However, the company’s stock fell 0.7% in extended trading after hitting an intraday high early Tuesday.
Optimism about AI has pushed Microsoft’s stock price above $3 trillion this month, overtaking Apple.
Chipmaker Advanced Micro fell 6% after first-quarter sales fell short of expectations, despite expecting strong sales of AI processors.
Nvidia’s stock price soared 27% in January after more than tripling last year on optimism about AI, but some of that gain was given back in extended trading, ending the year by more than 2%. It fell.
Server maker Super Microcomputer, another company that benefited from AI-related demand, fell more than 3%. It had risen to a record high early Tuesday after reporting strong quarterly results the previous day.
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