Today’s trading reveals technology investors see the glass half empty at the moment. A tech malaise fueled by Google parent Alphabet (Nasdaq: GOOGL) and chipmaker AMD (Nasdaq: AMD) is pressuring the Nasdaq Composite and S&P 500 moderately lower while the Dow Jones Industrial Average is eking out a gain.
The tech malaise can be blamed on Alphabet’s steep 8% drop, owing to a revenue shortfall coupled on top of an aggressive AI spending plan that didn’t sit well with Wall Street. AMD stock, a member of the Nasdaq Composite, is currently down 9% as of mid-morning. Amazon (Nasdaq: AMZN) shares are down in sympathy ahead of the company’s earnings report after the closing bell tomorrow.
Key Points
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Tech is weighing on the Nasdaq Composite and S&P 500 while the Dow Jones Industrial Average is eking out modest gains.
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Google parent Alphabet stock is sinking 8% on aggressive AI capex plans despite a revenue miss.
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AMD shares are down a steep 9% on weak data center results, but Wall Street says the quarter was “better than feared.”
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Amazon shares are down in sympathy ahead of the company’s quarterly results on Thursday.
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Despite selling pressure the S&P 500 is managing to hover above the key 6,000 level, buoyed by stocks like Newmont Mining (NYSE: NEM) with a 4% gain and trucking company Old Dominion Freight Line (Nasdaq: ODFL) with a 6% jump in response to earnings. On the economic front, the economy appears to be humming as the workforce added a higher than expected 183,000 private payrolls in January, fueled by service providers, while wages rose, according to ADP data.
Here’s a look at the performance as of morning trading:
Dow Jones Industrial Average: up 38.57 (+0.09%)
Nasdaq Composite: down 78.77 (-0.41%)
S&P 500: down 7.76 (-0.13%)
Tech Earnings Roundup
Alphabet’s Q4 revenue missed consensus estimates while the company has earmarked a whopping $75 billion in AI capex, including the development of data centers, amid fierce competitive headwinds from the U.S. and China. Google’s YouTube was another drag as its ad revenue slowed.
AMD’s stock is reeling after its data center revenue failed to meet high expectations. It shows how much AI is running the show, as AMD’s top and bottom lines came in better than expected.
Wall Street Moves
- A slew of analysts responded to AMD’s earnings print. Among them, Citi described AMD’s results as “decent” but lacking on AI revenue guidance. Goldman Sachs analysts called the results “better than feared” while the data center performance fell short.
- As for Alphabet, Goldman Sachs maintains a “buy” rating with a $220 price target, while BofA said, “Street could be underestimating AI Overview benefits for Search monetization in 2025.”
- Grab Holdings (Nasdaq: GRAB) is down 6% on the heels of a JPMorgan analyst downgrade to a “neutral” rating from “overweight” with a $5.60 price target, saying they are looking to better entry levels on the stock.
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