Tech Stocks Fall on Wall Street on Questions About Artificial Intelligence Spending
According to InfoMoney, fears about spending on artificial intelligence and weak results from traditional businesses weigh on the sector for the second day in a row
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM INFOMONEY · 2 MIN
US technology stocks opened sharply lower on Friday, for the second day in a row, according to InfoMoney. The movement reveals a growing distrust among investors about how much large companies in the sector will have to spend to sustain their investments in artificial intelligence.
At 9:45 a.m. New York time, the Nasdaq 100 was down 2.7% and the S&P 500 was down 1.2%, according to InfoMoney. BBC Business reported that the Nasdaq opened at the lowest level in more than two months and that Intel continued to fall, in a situation marked by concern about the costs of artificial intelligence.
According to InfoMoney, two causes come together. The first is fear about spending on artificial intelligence. The second is the weak results in the traditional businesses of large companies in the sector, that is, the operations that already existed before the wave of artificial intelligence.
The balance sheets of Alphabet and Amazon, according to InfoMoney, reinforced a specific fear: that artificial intelligence itself will end up cannibalizing the core businesses of these companies. In other words, new technology could reduce revenue from the operations that support these companies today.
The point at stake is the return. If investments in artificial intelligence take time to convert into revenue in core products, the market tends to continue demanding answers, and each balance sheet becomes a test of confidence for the largest American companies in the sector.
What changes for the investor
When an index like the Nasdaq concentrates much of its weight in technology companies, a review of expectations in this group directly affects those who invest through funds linked to it or through ETFs. It is worth observing how much of the portfolio is exposed to these securities, how companies treat spending on artificial intelligence in the next balance sheets and whether the discussion about cannibalization gains or loses momentum. This reading does not involve price prediction or indication of buying or selling, but it helps separate the day-to-day noise from a change in thesis.
Automatically translated from Portuguese.
