Wall Street closes down affected by Alphabet results

A new York stock exchange closed down today, affected by the disappointing results of Alphabet (Google), which revived fears about the profitability of artificial intelligence (IA).

The result of the session indicates that the Nasdaq technological index lost 1.38%, the extended S&P500 declined 0.30% and the selective Dow Jones Industrial Average decreased 0.25%.

“ It is clear that the month was particularly embarrassing for investors who bet on AI,” said Angelo Kourkafas, Edward Jones, in statements to AFP.

The most recent episode was the sharp fall of Alphabet, Google’s ‘holding’ home, verified today, one day after spreading quarterly results below expectations.

Penalized in particular by the fall in advertising, the group devalued 12.64%, which represents a decrease in stock market capitalization by $480 billion in just one session.

Given its weight on the stock market, its fall “has weighed on investors’ feelings about technological values, in particular those most exposed to AI”, commented Briefing analysts. Com.

Last week, Meta (Facebook, Instagram) had already shaken the sector by reviving investors' fears about the increasing cost of spending on this technology.

It is now known that Alphabet, only in the third quarter, invested 51 billion dollars, mostly directed to its data centres, more than the 45 billion in the previous quarter.

“Investors are questioning the economic model” around this technology, Kourkafas estimates. “They want tangible proof that all these investments will eventually translate into profit improvement.”.

Semiconductor conglomerates – essential for the construction of data centers where AI models are trained – today, cases of Nvidia (-0.80%), AMD (-2.08%) and Broadcom (-1.94%).

In turn, Microsoft, which lost 0.16%, performed better after presenting results that exceeded analysts' expectations.

Its remote computer activity (cloud) saw its turnover rise by 30% in homologous countries.

Next, Kourkafas commented, “money does not leave the stock market. It simply changes from one sector to another.”.

Thus, investors reacted well to other out-of-tech results, cases of Norwegian cruise company (+13.33 %) and pharmaceutical companies Eli Lilly (6.57%) and Merck (3.85%).