AI summary
Summary of article:
Financial reports from US technology giants raised market doubts about AI investment recovery and funding sources, leading to a decline in global technology stocks. Among the seven giants, only Apple, Microsoft and Huida are still growing this year.
Global technology stocks fell on the 30th after a series of negative financial reports from major US technology companies, highlighting deepening market skepticism about where money to invest in artificial intelligence (AI) infrastructure will come from.
The Nikkei 225 stock price index, which is home to Japanese technology stocks, closed down 2.4% on the 30th. The share price of SoftBank, a major investor in OpenAI, fell 6% and is now down 48% from its peak in June.
According to this environment,wall Street American stocks may also fall heavily as soon as the market opens. wayNasdaq 100 futures contracts fell 2%, while S&P 500 futures fell 0.9%.
Newman, Japan equity strategist at Astris Advisory in Tokyo, said: “Tech giants are entering the no-man’s land of ‘investables.'” Heavyweight indicator stocks such assoftbank The market value has halved in a few months. Investors are neither buying nor selling, and are simply eager to get out. “
A new wave of selling pressure on global technology stocks was fueled by concerns that profitable companies like Google were spending too much money on their AI investments and not enough using free cash flow to pay for them. Now they are increasingly turning to the public markets to issue new shares and debt to raise funds. “
The stock price of Google’s parent company Alphabet fell 13% on the 29th, and its market value dropped by US$500 billion overnight. The company’s free cash flow has fallen into negative territory for two consecutive quarters, and its funding gap has widened. It also said that search “AI models” were putting its core advertising business at risk.
Chipmaker Intel’s revenue forecast was lower than market expectations, revealing a slowdown in growth of its core PC chip business. After the market closed on the 29th, the share price fell 22%. The Nasdaq Composite Index also fell 1.4%.
Following the decline in the US stock market on Thursday, among the “Big Seven” technology stocks, Alphabet, Amazon, Meta and Tesla (TESLA) have changed their stock prices from red to dark so far this year. Only Apple, Microsoft and Huida have seen their share prices rise this year.
“The market is now more questioning the pace of capital expenditure implementation and the headwinds have become more apparent,” said Biggs, senior market strategist at BNP Paribas Asset Management.
Summary FAQ
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The main reason is that the market is concerned that money from investing in AI infrastructure is running out of money too fast, and even profitable companies are finding it difficult to rely on free cash flow. They have begun to turn to bond issuance and additional financing, raising investor doubts about returns and funding sources.
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On the 29th, Alphabet’s stock price fell 13%, and its market value dropped by US$500 billion, as free cash flow turned negative for the second consecutive quarter, and it warned that AI model search was endangering its core advertising business, making the market more uneasy about its profit prospects.
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After US stocks fell on Thursday, Alphabet, Amazon, Meta and Tesla all swung from gains to losses; Among the seven giants, only Apple, Microsoft and Huida are still growing this year.
