AI-related businesses had a $190 billion decline in stock market value late on Tuesday following the release of quarterly results by Advanced Micro Devices, Microsoft, Alphabet, and Microsoft, which failed to wow investors and sent their stocks flying.
The selloff that ensued after the bell, prompted by the reports from the tech titans, highlighted the heightened expectations of investors in the wake of the AI-driven stock market surge in recent months, which drove their shares to all-time highs with the prospect of deploying the technology throughout the corporate landscape.
Alphabet fell 5.6% as a result of the Google parent company’s lower-than-expected ad revenue for the December quarter.
In an effort to draw attention to the costs of its intense fight with Microsoft, Alphabet also announced that it will increase its spending on data centers this year in order to support its AI aspirations.
Driven by enthusiasm in artificial intelligence, Google Cloud’s revenue growth marginally above Wall Street projections; Azure from Microsoft increased more quickly.
Because of new artificial intelligence (AI) features that draw users to its cloud and Windows services, Microsoft’s quarterly revenue exceeded analyst projections. However, after temporarily reaching a record high for the intraday on Tuesday, the company’s stock dropped 0.7% in extended trading.
This month, optimism regarding AI helped Microsoft’s stock market worth surpass $3 trillion, surpassing Apple, opening a new tab.
Even though chipmaker Advanced Micro predicted high sales for its AI chips, the company’s prediction for first-quarter revenue missed projections, sending the stock plunging 6%.
Nvidia (NVDA.O) shares, which opened a new tab and rose 27% in January after more than tripling the previous year due to optimism about AI, also gave back some of those gains in extended trading, closing the day down more than 2%.
Super Micro Computer, another firm that has profited from demand related to AI, saw a decline of more than 3% in its stock price. It had reached a record high earlier on Tuesday following the release of stunning quarterly results the previous day.
