AI Dream Turns Nightmarish: $190B Wiped Out After After Microsoft, Alphabet, AMD Earnings
Portfolio Pulse from Benzinga Neuro
The stock market value of AI-related companies dropped by $190 billion following the earnings reports of Microsoft (MSFT), Alphabet (GOOGL), and AMD (AMD). Alphabet's shares fell 5.6% due to lower-than-expected ad revenue and increased spending on AI, while Microsoft's shares dipped 0.7% despite beating revenue estimates, after reaching a record high earlier. AMD's stock declined by 6% after its revenue forecast fell short of expectations, despite strong AI processor sales. This downturn contrasts with the AI-driven rally earlier in January, which had pushed tech stocks to new highs.
January 31, 2024 | 1:20 pm
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NEGATIVE IMPACT
AMD's stock saw a 6% drop after its revenue forecast for Q1 missed estimates, despite projecting strong sales for AI processors.
AMD's weaker revenue forecast is likely to overshadow the strong sales projection for AI processors, resulting in a negative short-term impact on the stock price.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Alphabet's stock declined by 5.6% after Q4 ad revenue missed expectations and the company announced increased spending on AI, indicating cost pressures.
Alphabet's lower-than-expected ad revenue and increased AI spending are likely to concern investors about profitability, leading to a negative short-term impact on the stock.
CONFIDENCE 85
IMPORTANCE 85
RELEVANCE 95
NEGATIVE IMPACT
Microsoft's stock fell by 0.7% in extended trade despite beating revenue estimates, after reaching an intra-day record high due to AI optimism.
The drop in Microsoft's stock price, despite positive earnings, suggests a market correction after a significant AI-driven rally. The short-term impact is likely negative as the market adjusts to the new information.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90