From The Economic Times · · 1m 30s
US Stocks Drop as Alphabet Revenue Miss Sparks AI Spending Fears
Alphabet's revenue miss fuels AI spending worries, dragging down US stocks.
In brief
Alphabet's revenue miss fuels AI spending worries, dragging down US stocks. Alphabet's disappointing quarterly revenue and accelerated AI spending concerns caused US stocks to fall, with Nasdaq down 1.36%. Originally reported by The Economic Times.
Wall Street Ends Lower
Wall Street ended lower on Thursday as Alphabet's revenue miss and rising artificial intelligence spending reignited concerns over whether Big Tech's investments will generate adequate returns.
Nasdaq Falls 1.36%
The Nasdaq Composite fell 1.36% to 26,188.08, while the S&P 500 declined 0.31% to 7,721.02.
Alphabet Shares Decline
Alphabet shares slumped after the Google parent reported disappointing quarterly revenue and accelerated AI related cash spending.
AI Spending Concerns Grow
The sell off reflected growing scrutiny of companies pursuing expensive AI ambitions, particularly those relying on borrowing and heavy cash outflows to fund their expansion.
Investment Analyst Comment
Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky, noted small caps outperforming as a sign the market's interpretation of cracks in the AI story doesn't mean cracks in every corner of the market.
Economic Data Mixed
US gross domestic product grew at an annualised 3.4% in the third quarter, surpassing analyst expectations, but price pressures continued to intensify with an oil supply crunch linked to the war adding to broader inflation…
Corporate Earnings Resilient
Of the 253 S&P 500 companies that had reported results, 81% exceeded analyst expectations, with analysts expecting aggregate third quarter earnings growth of 31% year on year.
The key point
Alphabet's disappointing quarterly revenue and accelerated AI spending concerns caused US stocks to fall, with Nasdaq down 1.36%.
