AI summary
Summary of article:
Investors have become pessimistic about big technology stocks and AI transactions, causing the Nasdaq 100 index to fall into correction territory for the third time this year, reflecting the market’s growing skepticism about the AI theme and high valuations.
As investors become increasingly pessimistic about big tech stocks and artificial intelligence (AI) deals,Nasdaq The 100 index fell into correction zone on the 2nd.
On the 2nd, the Nasdaq 100 index fell 1.4% to 27,989.82 points. It has retreated more than 10% from the high point on October 6, meeting the technical definition of entering correction territory. Although the index is still up 11% this year, it has fallen into the correction zone for the third time this year, indicating that investors’ views on AI seem to be constantly changing, causing shocks to the market.
The selloff comes as Wall Street is concerned about the cost of building AI infrastructure and the time it will take to spend hundreds of billions of dollars to pay for it.Google Parent company Alphabet reported last week that revenue from its advertising and search business for the last quarter was below expectations, sending its share price plunging, its worst one-day performance ever.meta After Amazon and Amazon announced their recent earnings reports, their stock prices also fell.
Brian Culpepper, portfolio manager at James Investment Research, said: “People are starting to get excited that these companies (tech giants) are continuing to spend, spend and spend more money.” “I don’t think AI trading is dead yet, but it has really come a long way. The overall market has been quite strong this year, and that has caused many stock prices to tighten up, especially when the AI theme involves many different stocks.”
In addition to the “Big Seven” technology companies, several technology companies also reported disappointing financial results, including chip maker Intel and software company ServiceNow.
Summary FAQ
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As investor confidence in large-cap technology stocks and AI trading weakened, selling pressure increased, with the index falling 1.4% in a single day and retreating more than 10% from its high on October 6, thus meeting the definition of a correction zone.
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The market is worried that the investment cost of AI infrastructure is too high, and it is still unclear when the hundreds of billions of dollars of expenditure can be recovered. Additionally, tech giants continue to expand capital spending, making investors even more concerned about valuations and returns.
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Alphabet’s advertising and search revenue last quarter was lower than expected, and its stock price hit its worst single-day performance in history. Meta and Amazon also fell after their financial reports; Apart from this, the performance of companies like Intel and ServiceNow was also not as per expectations.
