S&P 500, Nasdaq fall as earnings season gathers speed; Alphabet the biggest drag
Photo: Investhing
The S&P 500 and the Nasdaq slipped on Wednesday, with Alphabet the biggest drag after the tech giant's dour cloud revenue and hefty investments into artificial intelligence disappointed investors, while a slew of earnings added to the volatility, News.Az reports citing Investing.
Google-parent Alphabet (GOOGL.O), opens new tab dropped 8.2% after posting downbeat cloud revenue growth and earmarking a higher-than-expected $75 billion for its AI buildout this year.
"The market has some evidence to suggest that there are other companies that possibly doing it cheaper, better, faster, quicker," said Dave Grecsek, managing director in planning strategy and research at Aspiriant.
"So what is the wisdom of continuing to maintain high capex?"
AI-related stocks were rocked last week following the soaring popularity of a low-cost Chinese artificial intelligence model developed by startup DeepSeek. Nvidia (NVDA.O), opens new tab, one of the companies that was the worst hit, was up 3.8% on the day.
Advanced Micro Devices (AMD.O), opens new tab, meanwhile, lost 8.9% after CEO Lisa Su said the company's current-quarter data center sales - a proxy for its AI revenue - would fall about 7% from the previous quarter.
On the data front, U.S. services sector activity unexpectedly slowed in January amid cooling demand, helping curb price growth, a reading from the Institute for Supply Management showed.
Private payrolls rose by 183,000 jobs last month, compared with an estimated 150,000 increase, per economists polled by Reuters.
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