Alphabet's balance sheet drops Nasdaq and reignites doubts about the return on investments in AI
Google shares fall after a lower-than-expected result, and Wall Street opens lower as it awaits inflation data.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM MONEY TIMES · 2 MIN
Wall Street opened lower on Thursday (10/29), pressured by the balance sheet of Alphabet, Google's parent company, which reignited doubts about the costs of artificial intelligence. According to the Money Times, the Dow Jones fell 0.74%, to 52,086.13 points, the S&P 500 lost 0.57%, to 7,699.61 points, and the Nasdaq lost 1.31%, to 26,201.823 points.
The role of Google's parent company was the center of the session. According to Money Times, Alphabet shares were down 12% in the morning after the company came in lower than expected in both adjusted earnings per share and third-quarter revenue. InfoMoney reported a 10% drop in after-hours business, after sales below expectations.
The question goes beyond a single quarter. According to InfoMoney, investors are concerned about the return on the billions invested in AI and the possibility of Alphabet losing ground to competitors. The question that remains is whether these expenses already translate into revenue at the same speed.
The macroeconomic backdrop also weighed in. The Fed kept interest rates unchanged on 10/28, and investors began to await inflation data, reports Money Times. Without a clear signal about the direction of interest rates, each balance gains greater weight in price formation.
The week's agenda follows the same tone. According to InfoMoney, the Nasdaq Future was already falling more than 1% on Thursday, the day Amazon released its balance sheet. Apple reports the following week.
What changes for the investor
For those who invest in the stock market, in the Nasdaq, in interest or in dollars, the movement shows how the technological index reacts strongly to each result of a leading company. The balance sheets of Amazon and Apple will be new tests of these companies' ability to convert investments in artificial intelligence into growth, and the inflation data, still pending, should indicate the space that the Fed will have to change interest rates. It is worth monitoring whether the market starts to differentiate between individual cases or whether caution spreads across the sector.
Automatically translated from Portuguese.
