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1. AI Companies Lose $190 Billion in Market Cap After Alphabet and Microsoft Report:
- On a recent Tuesday, AI-related companies experienced a significant selloff in stock market value. This occurred after Microsoft, Alphabet (Google's parent company), and Advanced Micro Devices (AMD) reported quarterly results that failed to impress investors. The market had previously seen a rally fueled by optimism about AI technology, which had propelled these companies' shares to record highs. However, the latest results fell short of expectations, leading to a drop in market cap¹.
- Alphabet's stock dropped 5.6% after its December-quarter ad revenue missed expectations. The company also highlighted increased spending on data centers to support its AI plans, emphasizing the competitive landscape against AI rival Microsoft. While Google Cloud revenue growth was positive, Microsoft's Azure grew even faster.
- Chipmaker Advanced Micro also faced challenges, with its forecast for first-quarter revenue missing estimates despite strong sales projections for its AI processors. Nvidia, another AI-focused company, saw a decline in its stock price after a surge in January.
- Overall, the market correction reflected investors' elevated expectations following the AI-driven rally.
2. Tech Rally Exhaustion and Nvidia's Swing:
- The AI-fueled tech rally showed signs of exhaustion, impacting tech stocks. Nvidia, a stalwart in the industry, experienced a nearly 7% swing in Thursday's trading session. It briefly rose by 3% before ending the day lower by 3.5%².
3. AI and Market Crashes:
- While some worry that AI might cause a market crash, it's essential to consider the net effect. AI probably lowers the chances of a market crash overall³.
4. Big Tech Sell-Off in 2024:
- In a single day, the Magnificent 7 tech stocks lost more than $750 billion in market cap. EV maker Tesla and Alphabet were among the companies affected⁴.
Remember that stock market movements are influenced by various factors, and AI's impact is just one piece of the puzzle. If you have any other questions or need further information, feel free to ask! 😊
Copilot, 2024-07-25
(1) AI companies lose $190 billion in market cap after Alphabet and .... https://finance.yahoo.com/news/ai-companies-lose-190-billion-001522645.html.
(2) Stock market today: US stocks edge lower as AI-fueled tech rally stalls. https://markets.businessinsider.com/news/stocks/stock-market-today-ai-fueled-tech-rally-stalls-nvidia-tops-2024-6.
(3) Stop Worrying That AI Will Cause the Market to Crash. https://www.washingtonpost.com/business/2023/10/18/will-ai-cause-the-stock-market-to-crash-probably-not/3764fc30-6d9d-11ee-b01a-f593caa04363_story.html.
(4) Stock market news today: Stocks smoked, Nasdaq falls over 3.5% in worst .... https://finance.yahoo.com/news/stock-market-news-today-stocks-smoked-nasdaq-falls-over-35-in-worst-day-since-2022-after-tesla-alphabet-trigger-big-tech-sell-off-170849829.html.
It looks like generative AI already peaked