Tech stocks tumble after Meta misses on earnings
A disappointing earnings report from Meta Platforms Inc. has technology investors on edge ahead of results from some of the stock market’s biggest and most important companies in the coming days.
Technology stocks tumbled on Thursday with the tech-heavy Nasdaq 100 Index falling as much as 2% after Meta forecast weaker-than-expected sales in the current quarter while targeting higher capital expenditures. The selloff wiped out roughly $400 billion in market value from the benchmark at the low.
Meta slumped as much as 16%. Alphabet Inc. and Microsoft Corp., which both report earnings on Thursday afternoon, dropped more than 5%. Amazon.com Inc., whose results are due on April 30, fell nearly 6%.
Before its earnings, Meta shares had rallied this year amid heavy spending on artificial intelligence — and investors had been looking for use of the technology to boost results. Instead, the disappointing revenue forecast raised questions about returns on those investments and whether expectations for other Big Tech peers are too high.
“The disappointment on the revenue side is overshadowing any optimism about AI,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors. “It’s hard to tell what the benefit will be to users, and while AI could ultimately mean some cost savings down the line, that isn’t visible yet.”
For analysts at Lynx Equity Strategies, Meta’s results raised broader questions about the AI trade.
“For all of this attention on AI, why isn’t the company able to beat June expectations,” analysts KC Rajkumar and Jahanara Ahmed said. “Is the monetization of gen AI on track with management’s expectations?”
Elsewhere in technology, International Business Machines Corp. and software maker ServiceNow Inc. added
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