Late on Tuesday, the value of the stock market for AI-related businesses dropped by $190 billion as a result of Microsoft, Alphabet, and Advanced Micro Devices releasing quarterly results that disappointed investors who had earlier driven their prices upward.
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 order to underscore the expenses of its intense competition with Microsoft, Alphabet also announced that it will be spending more on data centers this year to support its AI aspirations.
Microsoft’s Azure overtook Google Cloud in terms of revenue growth, even if Google Cloud’s revenue growth marginally above Wall Street projections due to interest in AI.
With new AI features driving users to its cloud and Windows services, Microsoft exceeded analyst projections for quarterly revenue. Nonetheless, after momentarily touching a record high for the intraday on Tuesday, its shares dropped 0.7% in extended trading.
Microsoft’s stock market worth surpassed Apple this month, surpassing $3 trillion, as a result of optimism regarding artificial intelligence.
While projecting robust sales for its AI chips, chipmaker Advanced Micro saw a 6% decline in shares after missing revenue projections for the first quarter.
After more than tripling in value last year due to optimism surrounding AI, Nvidia’s shares climbed 27% in January but later gave part of those gains back in extended trading, closing more than 2% lower.
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.
