AI-related companies lost $190 billion in stock market value late on Tuesday after Microsoft NASDAQ:MSFT, Alphabet NASDAQ:GOOG and Advanced Micro Devices NASDAQ:AMD delivered quarterly results that failed to impress investors who had sent their stocks soaring.
The selloff following the tech giants' reports after the bell underscored investors' elevated expectations following an AI-fueled stock market rally in recent months that propelled their shares to record highs with the promise of incorporating the technology across the corporate landscape.
Alphabet dropped 5.6% after the Google-parent's December-quarter ad revenue missed expectations.
Alphabet also said its spending on data centers to support its AI plans would jump this year, highlighting the costs of its fierce competition against AI rival Microsoft.
While Google Cloud revenue growth slightly topped Wall Street targets, boosted by interest in AI, Microsoft's Azure grew faster.
Microsoft beat analyst estimates for quarterly revenue as new AI features helped attract customers to its cloud and Windows services. However, its stock fell 0.7% in extended trade after briefly hitting an intra-day record high earlier on Tuesday.
Optimism about AI pushed Microsoft's stock market value above $3 trillion this month, eclipsing Apple NASDAQ:AAPL .
Chipmaker Advanced Micro tumbled 6% after its forecast for first-quarter revenue missed estimates, even as it projected strong sales for its AI processors.
Shares of Nvidia NASDAQ:NVDA , which have surged 27% in January after more than tripling last year on AI optimism, also gave back some of those gain in extended trade, last down over 2%.
Server maker Super Micro Computer NASDAQ:SMCI , another company that has benefited from AI-related demand, dropped over 3%. Earlier on Tuesday, it had climbed to a record high after delivering amazing quarterly results the day before.
The main technical graph for Nasdaq-100 Micro E-Mini Futures CME_MINI:MNQ1! illustrates that bearish channel is in development in this time, where 17800 points is the upper (resistance) side and 17000 points level becomes attractive to watch.
3-months mid-term VIX Futures spread (the difference between front, February, 2024 VIX Futures contract CBOE:VXG2024 and May, 2024 VIX Futures contract CBOE:VXK2024 that is 3 months ahead) still is in Bearish mode, saying there's no panic yet on the streets.
50/200-hours MACD says btw, bearish sentiment becomes more active.