empty
31.10.2024 08:41 AM
AI Breaks and Breaks: Amazon Spends, Microsoft Gains, Nasdaq Slips

This image is no longer relevant

U.S. Indexes Close Lower: 'Chip' Fever and Earnings Expectations

The American stock market ended Wednesday with a decline, as chipmakers slipped and investors paused, awaiting corporate earnings.

Microsoft: Beating the Estimates

After the market closed, Microsoft and Meta Platforms (banned in Russia) reported earnings that exceeded revenue forecasts. These positive results drew attention to upcoming reports from other tech giants, reinforcing confidence in the "heavyweights" of the tech market.

Alphabet: 'Magnificent Seven' Reports Offer a Bright Spot

Among the largest players in the top "Magnificent Seven," Alphabet also showed impressive results. Its 2.8% growth on Tuesday after beating third-quarter revenue and earnings expectations gave the market a small boost, helping to offset the negative impact from the decline in chipmaker stocks.

Chipmakers Under Pressure: AMD and Qorvo Slump

Shares of Advanced Micro Devices (AMD) and Qorvo faced significant pressure. Grim forecasts triggered drops of 10.6% and 27.3% in their stock prices, respectively.

Heavy Losses for Super Micro and Nvidia

Super Micro Computer dropped 32.6% after Ernst & Young stepped down as the company's auditor. Nvidia also ended in the red, with a 1.4% drop.

Tech Sector Hit Hard

The information technology sector saw the biggest drop among S&P 500 sectors, down 1.34%, while the communication services sector showed slight growth due to Alphabet's success.

Market Optimism Fades

According to Michael James, managing director of equity trading at Wedbush Securities, the volatility in Qorvo, Advanced Micro, and Super Micro stocks is raising questions and "dulling the rosy picture" set by Alphabet's impressive report.

Focus Turns to Earnings and Forecasts

"There will be a laser focus on earnings and company guidance reports," added James, highlighting the intense anticipation among investors.

Small Losses but Significant Expectations

Wednesday ended with small declines across major indexes. The Dow Jones Industrial Average fell by 91.51 points (0.22%) to settle at 42,141.54. The S&P 500 also slipped, down by 19.25 points (0.33%) to 5,813.67, while the Nasdaq Composite recorded the largest drop, losing 104.82 points (0.56%) to close at 18,607.93.

U.S. Economy Grows but Below Expectations

According to preliminary data from the U.S. Department of Commerce, GDP grew by 2.8% annually in the third quarter, slightly below the forecasted 3.0% growth rate. This minor gap between actual and expected results raised some concerns in the market, although the overall growth trend remains positive.

Private Sector Exceeds Job Growth Expectations

In other positive news, the private sector saw stronger-than-expected job growth. October added 233,000 new jobs, above forecasts, signaling steady recovery in the labor market and giving investors a reason for optimism, reinforcing expectations of consumer activity and economic strength.

Political Tensions: Harris and Trump Run Neck-and-Neck

With the upcoming presidential election on November 5, the race between Kamala Harris and Donald Trump is a hot topic among market participants. According to the latest polls, the candidates are running neck and neck. Investors are keeping a close eye on the election's potential impact on economic policy and the market.

Disappointing Corporate Reports: Eli Lilly and Starbucks

Eli Lilly disappointed investors, dropping 6.2% after falling short of sales forecasts for its popular weight loss and diabetes medications. Analysts expected better results, leading to a decline in the pharma giant's stock.

Starbucks reported a decline in quarterly sales, with a decrease in global demand impacting the company's profits. Investors closely monitoring the cafe chain received confirmation that global economic challenges have affected even the largest brands.

NYSE Remains Positive Despite Declines

Despite the overall market downturn, the New York Stock Exchange showed a positive balance: for each stock that declined, another rose. A total of 210 new highs and 52 new lows were recorded, indicating a mixed sentiment, with many investors remaining optimistic.

New Highs and Lows: S&P 500 and Nasdaq Show Divergent Movement

The S&P 500 recorded 24 new 52-week highs and five new lows, while the Nasdaq Composite saw 126 new highs and 98 new lows. This divergence in performance illustrates mixed investor sentiment, with investors balancing between growth expectations and concerns for the tech sector.

Amazon Up Next: Markets Brace for Earnings Report

Amazon is expected to release its financial results on Thursday, and the forecasts suggest trends similar to recent reports from other tech giants. Investors worry that aggressive investments in AI and infrastructure could impact the company's high margins, potentially reducing interest in its stock.

Tech Sector Under Pressure: AI Comes at a High Cost

Shares of major tech giants continued to decline in aftermarket trading on Wednesday. A key challenge these companies face is balancing ambitious AI initiatives with the need to demonstrate short-term returns. "Investing in AI is costly. Building capacity is expensive," commented GlobalData analyst Beatriz Valle.

Capacity Competition: Capital Expenditures on the Rise

Tech corporations are in a race to build AI infrastructure, but widespread adoption of the technology will take time. According to Visible Alpha, Microsoft's quarterly capital expenditures now exceed its annual spending level before 2020. Meta has also significantly increased its spending, with quarterly investments now comparable to its annual costs before 2017.

Microsoft: AI Spending Increases and Potential Azure Slowdown

Microsoft reported a 5.3% increase in capital spending to $20 billion in the first fiscal quarter and confirmed further increases in AI investment in the coming quarter. However, the company warned that growth in its Azure cloud business may slow due to limited data center capacity. This statement added to investors' concerns.

These investments will undoubtedly help tech giants strengthen their positions in the AI market in the long term, but for now, the question of profitability and margin growth remains open.

Investments and Their Impact: Microsoft Slows Margins for Future Gains

Head of technology research at D.A. Davidson, Gil Luria, points out, "Investors sometimes overlook that each time Microsoft makes major investments, it dampens the company's margin by a full percentage point, which can drag on for the next six years." According to Luria, the current capital expenditures could slow Microsoft's margin metrics, creating a temporary barrier to profitability.

Chipmakers Struggling to Meet Demand: AI Growth Drives Shortages

Chip manufacturers like Nvidia face challenges in meeting the growing demand for AI components. Advanced Micro Devices, which reported earnings earlier this week, emphasized that AI chip demand is surging faster than production capacity. The company warned that AI chip supply will likely remain limited into next year, leaving some orders unfulfilled.

AI Investments Echo the Early Days of Cloud Technology

These substantial investments by tech giants hark back to the times when companies actively invested in cloud technology, waiting for customers to adopt and adapt to the new technology.

High-Stakes Bet on AI Infrastructure

"We're on the verge of significant opportunities, even if building infrastructure may raise questions for investors in the short term," said Meta (banned in Russia) CEO Mark Zuckerberg, commenting on the company's current spending. He stressed that the company plans to continue making substantial investments in AI infrastructure, preparing for future demand and long-term results.

Thomas Frank,
Pakar analisis InstaForex
© 2007-2025
Ringkasan
Segera
Analitic
Thomas Frank
Mulakan perdagangan
Jana pendapatan melalui perubahan kadar mata wang kripto dengan InstaForex.
Muat turun MetaTrader 4 dan buka dagangan pertama anda.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    SERTAI PERADUAN

Artikel yang dicadangkan

Syarikat Farmaseutikal Gergasi Tertekan: Saham Eli Lilly Menjunam Akibat Laporan Ujian Klinikal

Saham Eli Lilly jatuh setelah data peringkat akhir ubat penurunan berat badan secara oral Tuntutan pengangguran mingguan mencapai paras tertinggi dalam sebulan Indeks Topix Jepun naik melebihi 3,000 buat pertama

Thomas Frank 07:55 2025-08-08 UTC+2

Peneraju teknologi bersatu: Apple komited $100 bilion, S&P 500 mencatat rekod

Apple dijangka mengumumkan pelaburan sebanyak $100 bilion, menurut jurucakap Rumah Putih. Laporan pendapatan S&P 500 terus melebihi jangkaan. Saham teknologi memimpin kenaikan di tengah-tengah keputusan korporat yang kukuh di seluruh

10:25 2025-08-07 UTC+2

Kejayaan Teknologi Dirai di Wall Street: Apple Cecah $100 Bilion, S&P 500 Catat Rekod Baharu

Apple akan mengumumkan pelaburan sebanyak $100 bilion, jurucakap Rumah Putih menyatakan bahawa laporan pendapatan S&P 500 terus mengatasi jangkaan. Saham teknologi memacu lonjakan berikutan prestasi kukuh pendapatan korporat A.S. Indeks

Thomas Frank 07:12 2025-08-07 UTC+2

Ringkasan Berita Pasaran AS untuk 6 Ogos

Tarif perdagangan dan kejatuhan import memberi tekanan kepada saham Pasaran saham Amerika Syarikat ditutup dalam wilayah negatif berikutan kebimbangan pelabur terhadap kesan tarif perdagangan ke atas pendapatan korporat, termasuk syarikat

Ekaterina Kiseleva 12:20 2025-08-06 UTC+2

Ekonomi AS Perlahan — Tarif Menjejaskan Gergasi Korporat

Wall Street Ditutup Rendah Ketika Kebimbangan Tarif Menekan Sentimen Pasaran saham A.S. ditutup dalam wilayah negatif pada hari Selasa apabila para pelabur semakin gusar terhadap risiko yang berpunca daripada tarif

12:05 2025-08-06 UTC+2

Ekonomi AS Perlahan Apabila Tarif Mengenakan Gergasi-Gergasi

Caterpillar Memberi Amaran Mengenai Kesan Tarif Indeks Pengurus Pembelian Bukan Pembuatan ISM bagi bulan Julai jatuh kepada 50.1. Indeks: Dow Jones jatuh 0.1%, S&P 500 jatuh 0.5%, Nasdaq jatuh 0.7%

Thomas Frank 08:45 2025-08-06 UTC+2

Ringkasan Berita Pasaran AS untuk 5 Ogos

Pakej Opsyen Saham untuk Musk Melonjakkan Saham Tesla Saham Tesla meningkat sebanyak 2.2% susulan pengumuman pakej opsyen saham untuk Elon Musk yang merangkumi 96 juta saham, dengan anggaran nilai sekitar

Ekaterina Kiseleva 12:38 2025-08-05 UTC+2

Jutaan untuk Musk — berbilion untuk pelabur Tesla

Saham Tesla meningkat selepas penganugerahan sebanyak 96 juta saham kepada CEO Elon Musk. Spotify telah menaikkan harga langganan premium mereka, menyebabkan sahamnya meningkat. Laporan pendapatan di AS yang semakin baik

08:53 2025-08-05 UTC+2

Jutaan untuk Musk, Berbilion untuk Pelabur Tesla

Saham Tesla meningkat selepas bonus 96 juta saham kepada CEO Musk. Spotify menaikkan harga langganan premium, saham melonjak. Laporan pendapatan AS memperbaiki sentimen pasaran, saham teknologi meningkat. Niaga hadapan Euro

Thomas Frank 07:58 2025-08-05 UTC+2

Ringkasan Berita Pasaran AS untuk 4 Ogos

Isyarat Perbezaan Teknikal Menunjukkan Kemungkinan Pembetulan bagi S&P 500 Satu perbezaan telah dikenal pasti pada carta bulanan indeks S&P 500, dan pembetulan sebanyak 50% dijangka berlaku ke arah paras 4,325

Ekaterina Kiseleva 12:56 2025-08-04 UTC+2
Tidak boleh bertanya sekarang?
Tanya soalan anda di Ruangan bersembang.
Panggilan semula Widget
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.